================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 1995
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from to
----------------------------------------------
Commission Registrant, State of Incorporation, I.R.S. Employer
File Number Address and Telephone Number Identification No.
- - ----------- ----------------------------------- ------------------
1-3526 The Southern Company 58-0690070
(A Delaware Corporation)
270 Peachtree Street, N.W.
Atlanta, Georgia 30303
(770) 393-0650
1-3164 Alabama Power Company 63-0004250
(An Alabama Corporation)
600 North 18th Street
Birmingham, Alabama 35291
(205) 250-1000
1-6468 Georgia Power Company 58-0257110
(A Georgia Corporation)
333 Piedmont Avenue, N.E.
Atlanta, Georgia 30308
(404) 526-6526
0-2429 Gulf Power Company 59-0276810
(A Maine Corporation)
500 Bayfront Parkway
Pensacola, Florida 32501
(904) 444-6111
0-6849 Mississippi Power Company 64-0205820
(A Mississippi Corporation)
2992 West Beach
Gulfport, Mississippi 39501
(601) 864-1211
1-5072 Savannah Electric and Power Company 58-0418070
(A Georgia Corporation)
600 Bay Street, East
Savannah, Georgia 31401
(912) 232-7171
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<PAGE>
Securities registered pursuant to Section 12(b) of the Act:
Each of the following classes or series of securities registered pursuant to
Section 12(b) of the Act is registered on the New York Stock Exchange.
Title of each class Registrant
- - ------------------- ----------
Common Stock, $5 par value The Southern Company
-------------------------------------------------
Class A preferred, cumulative, $25 stated capital Alabama Power Company
7.60% (First 1992 Series) 6.80% Series
7.60% (Second 1992 Series) 6.40% Series
Adjustable Rate (1993 Series)
First mortgage bonds
9 1/4% Series due 2021
-------------------------------------------------
Preferred stock, cumulative, $100 stated value Georgia Power Company
$7.72 Series $7.80 Series
Class A preferred, cumulative, $25 stated value
$2.125 Series $1.9375 Series
$1.90 Series Adjustable Rate (First 1993 Series)
$1.9875 Series Adjustable Rate (Second 1993 Series)
$1.925 Series
Subsidiary obligated mandatorily redeemable
preferred securities, $25 stated value*
9% Monthly Income Preferred Securities, Series A
First mortgage bonds
6 1/8% Series due 1999 6 7/8% Series due 2002
----------------------------------------------------
Depositary preferred shares, each representing Mississippi Power Company
one-fourth of a share of preferred stock,
cumulative, $100 par value
7.25% Series 6.32% Series
6.65% Series
-----------------------------------------------------
Preferred stock, cumulative, $25 par value Savannah Electric and Power Company
6.64% Series
*Issued by Georgia Power Capital, L.P., and guaranteed to the extent Georgia
Power Capital has funds by Georgia Power Company.
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<PAGE>
Securities registered pursuant to Section 12(g) of the Act:
Title of each class Registrant
- - ------------------- ----------
Preferred stock, cumulative, $100 par value Alabama Power Company
4.20% Series 4.64% Series 5.96% Series
4.52% Series 4.72% Series 6.88% Series
4.60% Series 4.92% Series
Class A preferred, cumulative, $100,000 stated capital
Auction (1993 Series)
Class A preferred, cumulative, $100 stated capital
Auction (1988 Series)
--------------------------------------------------------
Preferred stock, cumulative, $100 stated value Georgia Power Company
$4.60 Series $4.72 Series $5.64 Series
$4.60 Series (1962) $4.92 Series $6.48 Series
$4.60 Series (1963) $4.96 Series $6.60 Series
$4.60 Series (1964) $5.00 Series
--------------------------------------------------------
Preferred stock, cumulative, $100 par value Gulf Power Company
4.64% Series 5.44% Series 7.88% Series
5.16% Series 7.52% Series
Class A preferred, cumulative, $10 par, $25 stated capital
6.72% Series 7.00% Series 7.30% Series
Adjustable Rate (1993 Series)
--------------------------------------------------------
Preferred stock, cumulative, $100 par value Mississippi Power Company
4.40% Series 4.60% Series 4.72% Series
7.00% Series
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<PAGE>
Indicate by check mark whether the registrants (1) have filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrants were required to file such reports), and (2) have been subject to
such filing requirements for the past 90 days. Yes X No___
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrants' knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. (X)
Aggregate market value of voting stock held by non-affiliates of The
Southern Company at February 29, 1996: $16.0 billion. Each of such other
registrants is a wholly-owned subsidiary of The Southern Company and has no
voting stock other than its common stock. A description of registrants' common
stock follows:
<TABLE>
<CAPTION>
Description of Shares Outstanding
Registrant Common Stock at February 29, 1996
- - ---------- -------------- --------------------
<S> <C> <C>
The Southern Company Par Value $5 Per Share 670,097,500
Alabama Power Company Par Value $40 Per Share 5,608,955
Georgia Power Company No Par Value 7,761,500
Gulf Power Company No Par Value 992,717
Mississippi Power Company Without Par Value 1,121,000
Savannah Electric and Power Company Par Value $5 Per Share 10,844,635
</TABLE>
Documents incorporated by reference: specified portions of The Southern
Company's Proxy Statement relating to the 1996 Annual Meeting of Stockholders
are incorporated by reference into PART III.
This combined Form 10-K is separately filed by The Southern Company,
Alabama Power Company, Georgia Power Company, Gulf Power Company, Mississippi
Power Company and Savannah Electric and Power Company. Information contained
herein relating to any individual company is filed by such company on its own
behalf. Each company makes no representation as to information relating to the
other companies.
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<PAGE>
Table of Contents
Page
PART I
Item 1 Business
The SOUTHERN System........................................ I-1
New Business Development................................... I-2
Certain Factors Affecting the Industry..................... I-3
Construction Programs...................................... I-3
Financing Programs......................................... I-5
Fuel Supply................................................ I-7
Territory Served........................................... I-8
Competition................................................ I-12
Regulation................................................. I-13
Rate Matters............................................... I-15
Employee Relations......................................... I-17
Item 2 Properties................................................... I-18
Item 3 Legal Proceedings............................................ I-23
Item 4 Submission of Matters to a Vote of Security Holders.......... I-23
Executive Officers of SOUTHERN............................... I-24
PART II
Item 5 Market for Registrants' Common Equity and Related
Stockholder Matters........................................ II-1
Item 6 Selected Financial Data...................................... II-2
Item 7 Management's Discussion and Analysis of Results
of Operations and Financial Condition...................... II-2
Item 8 Financial Statements and Supplementary Data.................. II-3
Item 9 Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure........................ II-4
PART III
Item 10 Directors and Executive Officers of the Registrants......... III-1
Item 11 Executive Compensation...................................... III-13
Item 12 Security Ownership of Certain Beneficial Owners and
Management................................................ III-30
Item 13 Certain Relationships and Related Transactions.............. III-36
PART IV
Item 14 Exhibits, Financial Statement Schedules, and Reports
on Form 8-K............................................... IV-1
i
<PAGE>
DEFINITIONS
When used in Items 1 through 5 and Items 10 through 14, the following terms will
have the meanings indicated. Other defined terms specific only to Item 11 are
found on page III-13.
Term Meaning
AEC.......................... Alabama Electric Cooperative, Inc.
AFUDC........................ Allowance for Funds Used During Construction
ALABAMA...................... Alabama Power Company
Alicura...................... Hidroelectrica Alicura, S.A. (Argentina)
AMEA......................... Alabama Municipal Electric Authority
Clean Air Act................ Clean Air Act Amendments of 1990
Communications............... Southern Communications Services, Inc.
Dalton....................... City of Dalton, Georgia
DOE.......................... United States Department of Energy
Edelnor...................... Empresa Electrica del Norte Grande, S.A. (Chile)
Energy Act................... Energy Policy Act of 1992
EMF.......................... Electromagnetic field
EPA.......................... United States Environmental Protection Agency
FERC......................... Federal Energy Regulatory Commission
FPC.......................... Florida Power Corporation
FP&L......................... Florida Power & Light Company
Freeport..................... Freeport Power Company (Bahamas)
GEORGIA...................... Georgia Power Company
GULF......................... Gulf Power Company
Gulf States.................. Gulf States Utilities Company
Holding Company Act.......... Public Utility Holding Company Act of 1935,
as amended
IBEW......................... International Brotherhood of Electrical Workers
IRS.......................... Internal Revenue Service
JEA.......................... Jacksonville Electric Authority
MEAG......................... Municipal Electric Authority of Georgia
MISSISSIPPI.................. Mississippi Power Company
Mobile Energy................ Mobile Energy Services Company, L.L.C.
NRC.......................... Nuclear Regulatory Commission
OPC.......................... Oglethorpe Power Corporation
operating affiliates......... ALABAMA, GEORGIA, GULF, MISSISSIPPI and SAVANNAH
PSC.......................... Public Service Commission
RUS.......................... Rural Utility Service (formerly Rural
Electrification Administration)
SAVANNAH..................... Savannah Electric and Power Company
SCS.......................... Southern Company Services, Inc.
SEC.......................... Securities and Exchange Commission
SEGCO........................ Southern Electric Generating Company
SEI.......................... Southern Electric International, Inc.
SEPA......................... Southeastern Power Administration
SERC......................... Southeastern Electric Reliability Council
SMEPA........................ South Mississippi Electric Power Association
SOUTHERN..................... The Southern Company
Southern Development......... The Southern Development and Investment Group,
Inc.
Southern Nuclear............. Southern Nuclear Operating Company, Inc.
SOUTHERN system.............. SOUTHERN, the operating affiliates, SEGCO, SEI,
Southern Nuclear, SCS, Communications,
Southern Development and other subsidiaries
SWEB......................... South Western Electricity plc (United Kingdom)
TVA.......................... Tennessee Valley Authority
ii
<PAGE>
PART I
Item 1. BUSINESS
SOUTHERN was incorporated under the laws of Delaware on November 9, 1945.
SOUTHERN is domesticated under the laws of Georgia and is qualified to do
business as a foreign corporation under the laws of Alabama. SOUTHERN owns all
the outstanding common stock of ALABAMA, GEORGIA, GULF, MISSISSIPPI and
SAVANNAH, each of which is an operating public utility company. ALABAMA and
GEORGIA each own 50% of the outstanding common stock of SEGCO. The operating
affiliates supply electric service in the states of Alabama, Georgia, Florida,
Mississippi and Georgia, respectively, and SEGCO owns generating units at a
large electric generating station which supplies power to ALABAMA and GEORGIA.
More particular information relating to each of the operating affiliates is as
follows:
ALABAMA is a corporation organized under the laws of the State of Alabama
on November 10, 1927, by the consolidation of a predecessor Alabama Power
Company, Gulf Electric Company and Houston Power Company. The predecessor
Alabama Power Company had had a continuous existence since its
incorporation in 1906.
GEORGIA was incorporated under the laws of the State of Georgia on June
26, 1930, and admitted to do business in Alabama on September 15, 1948.
GULF is a corporation which was organized under the laws of the State of
Maine on November 2, 1925, and admitted to do business in Florida on
January 15, 1926, in Mississippi on October 25, 1976 and in Georgia on
November 20, 1984.
MISSISSIPPI was incorporated under the laws of the State of Mississippi on
July 12, 1972, was admitted to do business in Alabama on November 28,
1972, and effective December 21, 1972, by the merger into it of the
predecessor Mississippi Power Company, succeeded to the business and
properties of the latter company. The predecessor Mississippi Power
Company was incorporated under the laws of the State of Maine on November
24, 1924, and was admitted to do business in Mississippi on December 23,
1924, and in Alabama on December 7, 1962.
SAVANNAH is a corporation existing under the laws of the State of Georgia;
its charter was granted by the Secretary of State on August 5, 1921.
SOUTHERN also owns all the outstanding common stock of SEI, Communications,
Southern Nuclear, SCS (the system service company), Southern Development and
other direct and indirect subsidiaries. SEI designs, builds, owns and operates
power production and delivery facilities and provides a broad range of technical
services to industrial companies and utilities in the United States and a number
of international markets. A further description of SEI's business and
organization follows later in this section under "New Business Development."
Communications provides digital wireless communications services to SOUTHERN's
operating affiliates and also markets these services to the public within the
Southeast. Southern Nuclear provides services to the Southern electric system's
nuclear plants. Southern Development explores, develops and markets energy
management services and other business lines relating to SOUTHERN's core
business of generating and distributing energy.
SEGCO owns electric generating units with an aggregate capacity of 1,019,680
kilowatts at Plant Gaston on the Coosa River near Wilsonville, Alabama, and
ALABAMA and GEORGIA are each entitled to one-half of SEGCO's capacity and
energy. ALABAMA acts as SEGCO's agent in the operation of SEGCO's units and
furnishes coal to SEGCO as fuel for its units. SEGCO also owns three 230,000
volt transmission lines extending from Plant Gaston to the Georgia state line at
which point connection is made with the GEORGIA transmission line system.
The SOUTHERN System
The transmission facilities of each of the operating affiliates and SEGCO are
connected to the respective company's own generating plants and other sources of
power and are interconnected with the transmission facilities of the other
operating affiliates and SEGCO by means of heavy-duty high voltage lines. (In
the case of GEORGIA's integrated transmission system, see Item 1 - BUSINESS -
"Territory Served" herein.)
Operating contracts covering arrangements in effect with principal
neighboring utility systems provide for capacity exchanges, capacity purchases
and sales, transfers of economy energy and other similar transactions.
I-1
<PAGE>
Additionally, the operating affiliates have entered into voluntary reliability
agreements with the subsidiaries of Entergy Corporation, Florida Electric Power
Coordinating Group and TVA and with Carolina Power & Light Company, Duke Power
Company, South Carolina Electric & Gas Company and Virginia Electric and Power
Company, each of which provides for the establishment and periodic review of
principles and procedures for planning and operation of generation and
transmission facilities, maintenance schedules, load retention programs,
emergency operations, and other matters affecting the reliability of bulk power
supply. The operating affiliates have joined with other utilities in the
Southeast (including those referred to above) to form the SERC to augment
further the reliability and adequacy of bulk power supply. Through the SERC, the
operating affiliates are represented on the National Electric Reliability
Council.
An intra-system interchange agreement provides for coordinating operations
of the power producing facilities of the operating affiliates and SEGCO and the
capacities available to such companies from non-affiliated sources and for the
pooling of surplus energy available for interchange. Coordinated operation of
the entire interconnected system is conducted through a central power supply
coordination office maintained by SCS. The available sources of energy are
allocated to the operating affiliates to provide the most economical sources of
power consistent with good operation. The resulting benefits and savings are
apportioned among the operating affiliates.
SCS has contracted with SOUTHERN, each operating affiliate, SEI, various of
the other subsidiaries, Southern Nuclear and SEGCO to furnish, at cost and upon
request, the following services: general executive and advisory services, power
pool operations, general engineering, design engineering, purchasing,
accounting, finance and treasury, taxes, insurance and pensions, corporate,
rates, budgeting, public relations, employee relations, systems and procedures
and other services with respect to business and operations. SEI, Southern
Development and Communications have also secured from the operating affiliates
certain services which are furnished at cost.
Southern Nuclear has contracted with ALABAMA to operate its Farley Nuclear
Plant, as authorized by amendments to the plant operating licenses. Southern
Nuclear also has a contract to provide GEORGIA with technical and other services
to support GEORGIA's operation of plants Hatch and Vogtle. Applications are now
pending before the NRC for amendments to the Hatch and Vogtle operating licenses
which, if approved, would authorize Southern Nuclear to become the operator. See
Item 1 - BUSINESS "Regulation - Atomic Energy Act of 1954" herein.
New Business Development
SOUTHERN continues to consider new business opportunities, particularly those
which allow use of the expertise and resources developed through its regulated
utility experience. These endeavors began in 1981 and are conducted through SEI
and other subsidiaries.
SEI's primary business focus is international and domestic cogeneration, the
independent power market, and the privatization and development of generation,
transmission and distribution facilities in the international market. During
1995, SEI also entered the business of power marketing.
Reference is made to Note 15 to the financial statements of SOUTHERN in Item
8 herein for additional information regarding SOUTHERN's business segments and
geographic areas.
In September 1995, SOUTHERN acquired SWEB, one of the United Kingdom's 12
regional electric distribution companies, for approximately $1.8 billion. SWEB's
main business is the distribution of electricity to customers in the Southwest
of England. Based in Bristol, SWEB serves approximately 1.3 million customers in
an area roughly the size of Connecticut, with almost 2 million residents. SWEB
is also a supplier of electricity to franchise customers in its authorized area
and to customers in the competitive second-tier market. Through its 7.7% equity
investment in Teesside Power Limited, a combined cycle gas turbine plant with a
capacity of 1,875 megawatts, SWEB is involved in power generation. In addition,
SWEB is involved in certain non-regulated activities which include gas supply
and telecommunications. For additional information regarding the acquisition of
SWEB, reference is made to Note 14 to SOUTHERN's financial statements in Item 8
herein.
I-2
<PAGE>
See Item 2 - PROPERTIES - "Other Electric Generation Facilities" herein for
additional information regarding SEI projects.
SEI and Southern Development render consulting services and market SOUTHERN
system expertise in the United States and throughout the world. They contract
with other public utilities, commercial concerns and government agencies for the
rendition of services and the licensing of intellectual property. More
specifically, Southern Development is focusing on new and existing programs to
enhance customer satisfaction and efficiency and stockholder value, such as:
Good Cents, an energy efficiency program for electric utility customers;
EnerLink, a group of energy management products and services for large
commercial and industrial electricity users; Flywheel, an energy storage device;
PowerCall Security, a home security system; other energy management programs
under development; and telecommunications operations related to energy
management programs.
By the end of 1995, the construction of Communications' wireless
communications system was essentially complete, and Communications began serving
SOUTHERN's operating affiliates and marketing its services to non-affiliates
within the Southeast. The system covers 122,000 square miles and combines the
functions of two-way radio dispatch, cellular phone, short text and numeric
messaging and wireless data transfer.
These continuing efforts to invest in and develop new business opportunities
offer the potential of earning returns which may exceed those of rate-regulated
operations. However, these activities also involve a higher degree of risk.
SOUTHERN expects to make substantial investments over the period 1996-1998 in
these and other new businesses.
Certain Factors Affecting the Industry
Various factors are currently affecting the electric utility industry in
general, including increasing competition and the regulatory changes related
thereto, costs required to comply with environmental regulations, and the
potential for new business opportunities (with their associated risks) outside
of traditional rate-regulated operations. The effects of these and other factors
on the SOUTHERN system are described herein; particular reference is made to
Item 1 - BUSINESS - "New Business Development," "Competition" and "Environmental
Regulation."
Construction Programs
The subsidiary companies of SOUTHERN are engaged in continuous construction
programs to accommodate existing and estimated future loads on their respective
systems. Construction additions or acquisitions of property during 1996 through
1998 by the operating affiliates, SEGCO, SCS, Southern Nuclear, Communications
and SEI are estimated as follows: (in millions)
---------------------------------------------------------
1996 1997 1998
-------- --------- ---------
ALABAMA $ 491 $ 446 $ 479
GEORGIA 530 537 529
GULF 71 67 71
MISSISSIPPI 67 62 53
SAVANNAH 33 30 23
SEGCO 13 6 7
SCS 29 16 10
Southern Nuclear 1 1 1
Communications 26 48 6
SEI* 213 218 123
========================================================
SOUTHERN system $1,474 $1,431 $1,302
========================================================
*These construction estimates do not include amounts which may be expended
by SEI on future power production projects or by any subsidiaries created to
effect such future projects.
Reference is made to Note 4 to the financial statements of each registrant
(except GULF) in Item 8 herein for the amounts of AFUDC included in the above
estimates. GULF's estimates include AFUDC of $75,000 in 1996 and no AFUDC in
1997 and 1998. (See also Item 1 - BUSINESS - "Financing Programs" herein.)
I-3
<PAGE>
<TABLE>
Estimated construction costs in 1996 are expected to be apportioned approximately as follows: (in millions)
=================================================================================================
SOUTHERN
system* ALABAMA GEORGIA GULF MISSISSIPPI SAVANNAH
- - -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Combustion turbines $ 24 $ 9 $ 15 $ - $- $ -
Other generating
facilities including
associated plant substations 332 90 85 19 9 10
New business 343 136 162 21 11 13
Transmission 147 62 60 2 22 1
Joint line and substation 29 - 24 4 1 -
Distribution 237 62 39 9 15 5
Nuclear fuel 133 72 61 - - -
General plant 229 60 84 16 9 4
- - -------------------------------------------------------------------------------------------------
$1,474 $491 $530 $71 $67 $33
=================================================================================================
</TABLE>
*Communications, SCS and Southern Nuclear plan capital additions to general
plant in 1996 of $26 million, $29 million and $1 million, respectively, while
SEGCO plans capital additions of $13 million to generating facilities. SEI plans
capital additions of $106 million to generating facilities and $107 million to
distribution facilities. These estimates do not reflect the possibility of SEI's
securing a contract(s) to buy or build additional generating facilities.
The construction programs are subject to periodic review and revision, and
actual construction costs may vary from the above estimates because of numerous
factors. These factors include changes in business conditions; revised load
projections; changes in environmental regulations; changes in existing nuclear
plants to meet new regulatory requirements; increasing costs of labor, equipment
and materials; and cost of capital.
The operating affiliates do not have any new baseload generating plants
under construction. However, within the service area, the construction of
combustion turbine peaking units with an aggregate capacity of approximately 600
megawatts is planned to be completed by 1998. In addition, significant
construction related to transmission and distribution facilities and the
upgrading and extension of the useful lives of generating plants will continue.
In 1991, the Georgia legislature passed legislation which requires GEORGIA
and SAVANNAH each to file an Integrated Resource Plan for approval by the
Georgia PSC. Under the plan rules, the Georgia PSC must pre-certify the
construction of new power plants. (See Item 1 - BUSINESS - "Rate Matters -
Integrated Resource Planning" herein.)
See Item 1 - BUSINESS - "Regulation - Environmental Regulation" herein for
information with respect to certain existing and proposed environmental
requirements and Item 2 - PROPERTIES - "Jointly-Owned Facilities" herein for
additional information concerning ALABAMA's and GEORGIA's joint ownership of
certain generating units and related facilities with certain non-affiliated
utilities.
Rocky Mountain Hydroelectric Plant
For information regarding GEORGIA's Rocky Mountain Plant, including a joint
ownership agreement with OPC and the uncertain recovery of GEORGIA's costs in
this plant, reference is made to Note 3 to SOUTHERN's and to GEORGIA's financial
statements in Item 8 herein.
I-4
<PAGE>
Financing Programs
SOUTHERN may require additional equity capital in 1996. The amount and timing of
additional equity capital to be raised in 1996, as well as subsequent years,
will be contingent on SOUTHERN's investment opportunities, primarily through
SEI. Equity capital can be provided from any combination of public offerings,
private placements, or SOUTHERN's stock plans. The operating affiliates'
construction programs are expected to be financed primarily from internal
sources. Short-term debt will be utilized as appropriate at SOUTHERN and the
operating affiliates. The operating affiliates may issue additional long-term
debt and preferred stock primarily for the purposes of debt maturities and for
redeeming higher-cost securities if market conditions permit.
In order to issue first mortgage bonds and preferred stock, each of the
operating affiliates must comply with earnings coverage requirements contained
in its respective mortgage and charter. These provisions require, for the
issuance of additional first mortgage bonds, a minimum, before income tax,
earnings coverage of twice the pro forma annual interest charges on first
mortgage bonds and indebtedness secured by prior or equal ranking lien and, for
the issuance of additional preferred stock, a minimum, after income tax,
earnings coverage of one and one-half times pro forma annual interest charges
and preferred stock dividends, in each case for a period of twelve consecutive
calendar months within the fifteen calendar months immediately preceding the
proposed new issue. The ability to issue securities in the future will depend on
coverages at that time. Currently each of the operating affiliates expects to
have adequate coverage ratios for anticipated requirements through at least
1998.
The amounts of securities representing short-term unsecured indebtedness
allowable under the respective charters, and the maximum amounts of short-term
or term-loan indebtedness authorized by the appropriate regulatory authorities,
are shown in the following table:
======================================================
Short-Term Unsecured Indebtedness
------------------------------------------------------
Allowable
Under Charter
at December 31, 1995
Percent of
Secured
Indebtedness
and Other
Amount Capital (2)
------------- -------------------
(Millions)
ALABAMA $ 1,123 20%
GEORGIA 1,677 20
GULF 88 10
MISSISSIPPI 149 20
SAVANNAH 68 20
SOUTHERN (1) (1)
------------------------------------------------------
======================================================
Short-Term or Term-Loan Indebtedness
------------------------------------------------------
Maximum Regulatory
Authorization
Outstanding at
Amount December 31, 1995
------------ ---------------------
(Millions)
ALABAMA $ 750 (3) $390
GEORGIA 1,700 (4) 400
GULF 150 (3) 118
MISSISSIPPI 350 (3) 55
SAVANNAH 90 (4) 4
SOUTHERN 2,000 (3) 619
--------------------------------------------------------
Notes:
(1) No limitation.
(2) Under the provisions of the respective charters, GEORGIA's,
MISSISSIPPI's and SAVANNAH's preferred stockholders have approved increases in
the amounts of securities representing short-term unsecured indebtedness which
the companies may have outstanding until July 1 in 2003, 1999 and 1999,
respectively. Such limitations were increased from 10% of secured indebtedness
and other capital to 20% thereof. These approved increases are reflected in the
above table.
I-5
<PAGE>
(3) ALABAMA's authority is based on authorization received from the Alabama
PSC, which expires December 31, 1998. No SEC authorization is required for
ALABAMA. GULF, MISSISSIPPI and SOUTHERN have received SEC authorization to issue
from time to time short-term and/or term-loan notes to banks and commercial
paper to dealers in the amounts shown through December 31, 1996, December 31,
2002 and March 31, 2001, respectively.
(4) GEORGIA and SAVANNAH have received SEC authorization to issue from time
to time short-term and term-loan notes to banks and commercial paper to dealers
in the amounts shown through December 31, 2002. Authorization for term-loan
indebtedness is also required by and has been received from the Georgia PSC.
Currently, GEORGIA and SAVANNAH have remaining authority from the Georgia PSC of
$809 million and $40 million expiring December 31, 1996 and June 30, 1996,
respectively.
Reference is made to Note 5 to the financial statements for SOUTHERN,
ALABAMA, GULF, MISSISSIPPI and SAVANNAH and Note 9 to the financial statements
for GEORGIA in Item 8 herein for information regarding the registrants' credit
arrangements.
I-6
<PAGE>
Fuel Supply
The operating affiliates' and SEGCO's supply of electricity is derived
predominantly from coal. The sources of generation for the years 1993 through
1995 and the estimates for 1996 are shown below:
Oil and
ALABAMA Coal Nuclear Hydro Gas
----------------------------------------
1993 70% 22% 8% *%
1994 68 23 9 *
1995 73 19 8 *
1996 73 20 7 *
GEORGIA
1993 77 20 3 *
1994 75 22 3 *
1995 74 22 3 1
1996 76 21 2 1
GULF
1993 99 ** ** 1
1994 100 ** ** *
1995 99 ** ** 1
1996 99 ** ** 1
MISSISSIPPI
1993 90 ** ** 10
1994 85 ** ** 15
1995 79 ** ** 21
1996 81 ** ** 19
SAVANNAH
1993 83 ** ** 17
1994 91 ** ** 9
1995 80 ** ** 20
1996 83 ** ** 17
SEGCO
1993 100 ** ** *
1994 100 ** ** *
1995 100 ** ** *
1996 100 ** ** *
SOUTHERN system***
1993 78 17 4 1
1994 75 19 5 1
1995 77 17 4 2
1996 78 17 4 1
---------------------------------------------------------
*Less than 0.5%.
**Not applicable.
***Amounts shown for the SOUTHERN system are weighted
averages of the operating affiliates and SEGCO.
The average costs of fuel in cents per net kilowatt-hour generated for 1993
through 1995 are shown below:
Oil and Weighted
ALABAMA Coal Nuclear Gas Average
----------------------------------------------
1993 2.11 0.51 * 1.73
1994 1.92 0.49 * 1.56
1995 1.71 0.50 * 1.48
GEORGIA
1993 1.75 0.58 * 1.52
1994 1.67 0.63 * 1.44
1995 1.67 0.60 * 1.44
GULF
1993 2.03 ** 4.50 2.05
1994 2.00 ** * 2.01
1995 2.08 ** 3.56 2.09
MISSISSIPPI
1993 1.66 ** 2.97 1.71
1994 1.67 ** 2.60 1.71
1995 1.58 ** 2.33 1.64
SAVANNAH
1993 2.02 ** 4.70 2.49
1994 2.19 ** 4.72 2.42
1995 1.77 ** 3.80 2.18
SEGCO
1993 1.80 ** * 1.81
1994 1.83 ** * 1.83
1995 1.87 ** * 1.87
SOUTHERN system***
1993 1.90 0.54 4.34 1.67
1994 1.80 0.56 3.99 1.56
1995 1.73 0.56 3.37 1.53
---------------------------------------------------------------
*Not meaningful because of minimal generation from fuel
source.
**Not applicable.
***Amounts shown for the SOUTHERN system are weighted
averages of the operating affiliates and SEGCO.
See SELECTED FINANCIAL DATA in Item 6 herein for each registrant's source
of energy supply.
I-7
<PAGE>
As of February 23, 1996, the operating affiliates and SEGCO had stockpiles
of coal on hand at their respective coal-fired plants which represented an
estimated 29 days of recoverable supply for bituminous coal and 32 days for
sub-bituminous coal. It is estimated that approximately 58.2 million tons of
coal will be consumed in 1996 by the operating affiliates and SEGCO (including
those units GEORGIA owns jointly with OPC, MEAG and Dalton and operates for FP&L
and JEA and the units ALABAMA owns jointly with AEC). The operating affiliates
and SEGCO currently have 38 coal contracts. These contracts cover remaining
terms of up to 17 years. Approximately 20% of 1996 estimated coal requirements
will be purchased in the spot market. Management has set a goal whereby the spot
market should be utilized, absent the transition from coal contract expirations,
for 20 to 30% of the SOUTHERN system's coal supply. Additionally, it has been
determined that approximately 34 days of recoverable supply is the appropriate
level for coal stockpiles. During 1995, the operating affiliates' and SEGCO's
average price of coal delivered was approximately $40 per ton.
The typical sulfur content of coal purchased under contracts ranges from
approximately 0.49% to 2.76% sulfur by weight. Fuel sulfur restrictions and
other environmental limitations have increased significantly and may increase
further the difficulty and cost of obtaining an adequate coal supply. See Item 1
- - - BUSINESS - "Regulation - Environmental Regulation" herein.
Changes in fuel prices are generally reflected in fuel adjustment clauses
contained in rate schedules. See Item 1 - BUSINESS - "Rate Matters - Rate
Structure" herein.
ALABAMA owns coal lands and mineral rights in the Warrior Coal Field,
located northwest of Birmingham in the vicinity of its Gorgas Steam Plant. SEGCO
also owns coal reserves in the Warrior Coal Field and in the Cahaba Coal Field,
which is located southwest of Birmingham. ALABAMA has agreements with
non-affiliated industrial and mining firms to mine coal from ALABAMA's reserves,
as well as their own reserves, for supply to ALABAMA's generating units.
The operating affiliates have renegotiated, bought out or otherwise
terminated various coal supply contracts. For more information on certain of
these transactions, see Note 5 to the financial statements of GULF and
MISSISSIPPI in Item 8 herein.
ALABAMA and GEORGIA have numerous contracts covering a portion of their
nuclear fuel needs for uranium, conversion services, enrichment services and
fuel fabrication. These contracts have varying expiration dates and most are
short to medium term (less than 10 years). Management believes that sufficient
capacity for nuclear fuel supplies and processing exists to preclude the
impairment of normal operations of the SOUTHERN system's nuclear generating
units.
ALABAMA and GEORGIA have contracts with the DOE that provide for the
permanent disposal of spent nuclear fuel. Although disposal was scheduled to
begin in 1998, the actual year this service will begin is uncertain. Sufficient
storage capacity currently is available to permit operation into 2003 at Plant
Hatch, into 2009 at Plant Vogtle, and into 2012 and 2014 at Plant Farley units 1
and 2, respectively.
The Energy Act imposed upon utilities with nuclear plants, including ALABAMA
and GEORGIA, obligations for the decontamination and decommissioning of federal
nuclear fuel enrichment facilities. See Note 1 to SOUTHERN's, ALABAMA's and
GEORGIA's financial statements in Item 8 herein.
Territory Served
The territory in which the operating affiliates provide electric service
comprises most of the states of Alabama and Georgia together with the
northwestern portion of Florida and southeastern Mississippi. In this territory
there are non-affiliated electric distribution systems which obtain some or all
of their power requirements either directly or indirectly from the operating
affiliates. The territory has an area of approximately 120,000 square miles and
an estimated population of approximately 11 million.
ALABAMA is engaged, within the State of Alabama, in the generation and
purchase of electricity and the distribution and sale of such electricity at
retail in over 1,000 communities (including Anniston, Birmingham, Gadsden,
I-8
<PAGE>
Mobile, Montgomery and Tuscaloosa) and at wholesale to 15 municipally-owned
electric distribution systems, 11 of which are served indirectly through sales
to AMEA, and two rural distributing cooperative associations. ALABAMA also
supplies steam service in downtown Birmingham. ALABAMA owns coal reserves near
its steam-electric generating plant at Gorgas and uses the output of coal from
these reserves in some of its generating plants. ALABAMA also sells, and
cooperates with dealers in promoting the sale of, electric appliances.
GEORGIA is engaged in the generation and purchase of electricity and the
distribution and sale of such electricity within the State of Georgia at retail
in over 600 communities (including Athens, Atlanta, Augusta, Columbus, Macon,
Rome and Valdosta), as well as in rural areas, and at wholesale currently to 39
electric cooperative associations through OPC, a corporate cooperative of
electric membership cooperatives in Georgia, and to 50 municipalities, 48 of
which are served through MEAG, a public corporation and an instrumentality of
the State of Georgia.
GULF is engaged, within the northwestern portion of Florida, in the
generation and purchase of electricity and the distribution and sale of such
electricity at retail in 71 communities (including Pensacola, Panama City and
Fort Walton Beach), as well as in rural areas, and at wholesale to a
non-affiliated utility and a municipality. GULF also sells electric appliances.
MISSISSIPPI is engaged in the generation and purchase of electricity and the
distribution and sale of such energy within the 23 counties of southeastern
Mississippi, at retail in 123 communities (including Biloxi, Gulfport,
Hattiesburg, Laurel, Meridian and Pascagoula), as well as in rural areas, and at
wholesale to one municipality, six rural electric distribution cooperative
associations and one generating and transmitting cooperative.
SAVANNAH is engaged, within a five-county area in eastern Georgia, in the
generation and purchase of electricity and the distribution and sale of such
electricity at retail and, as a member of the SOUTHERN system power pool, the
transmission and sale of wholesale energy.
The sources of revenues for the SOUTHERN system and each of SOUTHERN's
operating affiliates are shown in Item 6 herein. For the year ended December 31,
1995, the registrants derived their respective industrial revenues as shown in
the following table.
<TABLE>
========================================================================================
SOUTHERN
system ALABAMA GEORGIA GULF MISSISSIPPI SAVANNAH
- - ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Textiles 13% 10% 18% *% 3% *%
Chemical 11 15 6 21 14 32
Paper 10 10 11 12 5 34
Primary metal 7 14 5 1 2 *
Stone, clay, glass
and concrete 7 7 8 2 1 4
Utility services 8 8 9 3 9 5
Food 5 4 6 1 5 9
Government 5 2 5 39 10 *
Transportation equipment 3 1 4 1 7 10
Lumber and wood products 4 5 3 2 8 2
Other** 27 24 25 18 36 4
- - ---------------------------------------------------------------------------------------
100% 100% 100% 100% 100% 100%
=======================================================================================
*Less than 0.5%.
** Other major sources (5% or more) of industrial revenues were: ALABAMA, coal
mining (5%); GULF, oil and gas extraction (9%); and MISSISSIPPI, petroleum
refining (20%) and electric machinery (6%).
</TABLE>
I-9
<PAGE>
A portion of the area served by SOUTHERN's operating affiliates adjoins the
area served by TVA and its municipal and cooperative distributors. An Act of
Congress limits the distribution of TVA power, unless otherwise authorized by
Congress, to specified areas or customers which generally were those served on
July 1, 1957. On January 12, 1996, ALABAMA, GEORGIA and MISSISSIPPI filed a
lawsuit against TVA for violation of this Act. See Item 3 - LEGAL PROCEEDINGS
herein for additional information.
The RUS has authority to make loans to cooperative associations or
corporations to enable them to provide electric service to customers in rural
sections of the country. There are 71 electric cooperative organizations
operating in the territory in which the operating affiliates provide electric
service at retail or wholesale.
One of these, AEC, is a generating and transmitting cooperative selling
power to several distributing cooperatives, municipal systems and other
customers in south Alabama and northwest Florida. AEC owns generating units with
approximately 840 megawatts of nameplate capacity, including an undivided
ownership interest in ALABAMA's Plant Miller Units 1 and 2. AEC's facilities
were financed with RUS loans secured by long-term contracts requiring
distributing cooperatives to take their requirements from AEC to the extent such
energy is available. Two of the 14 distributing cooperatives operating in
ALABAMA's service territory obtain a portion of their power requirements
directly from ALABAMA.
Four electric cooperative associations, financed by the RUS, operate within
GULF's service area. These cooperatives purchase their full requirements from
AEC and SEPA. A non-affiliated utility also operates within GULF's service area
and purchases a portion of its requirements from GULF.
ALABAMA and GULF have entered into separate agreements with AEC involving
interconnection between the respective systems and, in the case of ALABAMA, the
delivery of capacity and energy from AEC to certain distributing cooperatives.
The rates for the various services provided by ALABAMA and GULF to AEC are based
on formulary approaches which result in the charges by each company being
updated annually, subject to FERC approval. See Item 2 - PROPERTIES -
"Jointly-Owned Facilities" herein for details of ALABAMA's joint-ownership with
AEC of a portion of Plant Miller.
Another of the 71 electric cooperatives is SMEPA, also a generating and
transmitting cooperative. SMEPA has a generating capacity of 739,000 kilowatts
and a transmission system estimated to be 1,357 miles in length. MISSISSIPPI has
an interchange agreement with SMEPA pursuant to which various services are
provided, including the furnishing of protective capacity by MISSISSIPPI to
SMEPA.
There are 43 electric cooperative organizations operating in, or in areas
adjoining, territory in the State of Georgia in which GEORGIA provides electric
service at retail or wholesale. Three of these organizations obtain their power
from TVA and one from other sources. Since July 1, 1975, OPC has supplied the
requirements of the remaining 39 of these cooperative organizations from
self-owned generation acquired from GEORGIA and, until September 1991, through
partial requirements purchases from GEORGIA. GEORGIA entered into an agreement
with OPC pursuant to which, effective in September 1991, OPC ceased to be a
partial requirements wholesale customer of GEORGIA. Instead, OPC began the
purchase of 1,250 megawatts of capacity from GEORGIA through 1999, subject to
reduction or extension by OPC, and may satisfy the balance of its needs through
purchases from others. During 1994 and 1995, OPC gave GEORGIA notice of its
intent to decrease its purchases of capacity by 250 megawatts in September 1996
and an additional 250 megawatts in September 1997.
There are 65 municipally-owned electric distribution systems operating in
the territory in which SOUTHERN's operating affiliates provide electric service
at retail or wholesale.
AMEA was organized under an act of the Alabama legislature and is comprised
of 11 municipalities. In 1986, ALABAMA entered into a firm power purchase
contract with AMEA entitling AMEA to scheduled amounts of capacity (to a maximum
of 100 megawatts) for a period of 15 years commencing September 1, 1986. In
October 1991, ALABAMA entered into a second firm power purchase contract with
AMEA entitling AMEA to scheduled amounts of additional capacity (to a maximum 80
I-10
<PAGE>
megawatts) for a period of 15 years beginning October 1, 1991. In both contracts
the power is being sold to AMEA for its member municipalities that previously
were served directly by ALABAMA as wholesale customers. Under the terms of the
contracts, ALABAMA received payments from AMEA representing the net present
value of the revenues associated with the respective capacity entitlements. See
Note 7 to ALABAMA's financial statements in Item 8 herein for further
information on these contracts.
Forty-seven municipally-owned electric distribution systems formerly served
on a full requirements wholesale basis by GEORGIA and one county-owned system
now receive their requirements through MEAG, which was established by a state
statute in 1975. MEAG serves these requirements from self-owned generation
facilities acquired from GEORGIA and through purchases of capacity and energy
from GEORGIA under partial requirements rates. Similarly, since 1977 Dalton has
filled its requirements from generation facilities acquired from GEORGIA and
through partial requirements purchases. One municipally-owned electric
distribution system is still served on a full requirements wholesale basis by
GEORGIA. (See Item 2 - PROPERTIES - "Jointly-Owned Facilities" herein.)
GULF and MISSISSIPPI provide wholesale requirements for one municipal system
each.
GEORGIA has entered into substantially similar agreements with OPC, MEAG and
Dalton providing for the establishment of an integrated transmission system to
carry the power and energy of each. The agreements require an investment by each
party in the integrated transmission system in proportion to its respective
share of the aggregate system load. (See Item 2 - PROPERTIES - "Jointly-Owned
Facilities" herein.)
ALABAMA, GEORGIA, GULF and MISSISSIPPI also have contracts with SEPA (a
federal power marketing agency) providing for the use of those companies'
facilities at government expense to deliver to certain cooperatives and
municipalities, entitled by federal statute to preference in the purchase of
power from SEPA, quantities of power equivalent to the amounts of power
allocated to them by SEPA from certain United States Government hydroelectric
projects.
The retail service rights of all electric suppliers in the State of Georgia
are regulated by the 1973 State Territorial Electric Service Act. Pursuant to
the provisions of this Act, all areas within existing municipal limits were
assigned to the primary electric supplier therein on March 29, 1973 (451
municipalities, including Atlanta, Columbus, Macon, Augusta, Athens, Rome and
Valdosta, to GEORGIA; 115 to electric cooperatives; and 50 to publicly-owned
systems). Areas outside of such municipal limits were either to be assigned or
to be declared open for customer choice of supplier by action of the Georgia PSC
pursuant to standards set forth in the Act. Consistent with such standards, the
Georgia PSC has assigned substantially all of the land area in the state to a
supplier. Notwithstanding such assignments, the Act provides that any new
customer locating outside of 1973 municipal limits and having a connected load
of at least 900 kilowatts may receive electric service from the supplier of its
choice. (See also Item 1 - BUSINESS - "Competition" herein.)
Under and subject to the provisions of its franchises and concessions and
the 1973 State Territorial Electric Service Act, SAVANNAH has the full but
nonexclusive right to serve the City of Savannah, the Towns of Bloomingdale,
Pooler, Garden City, Guyton, Newington, Oliver, Port Wentworth, Rincon, Tybee
Island, Springfield, Thunderbolt, Vernonburg, and in conjunction with a
secondary supplier, the Town of Richmond Hill. In addition, SAVANNAH has been
assigned certain unincorporated areas in Chatham, Effingham, Bryan, Bulloch and
Screven Counties by the Georgia PSC. (See also Item 1 - BUSINESS - "Competition"
herein.)
Pursuant to the 1956 Utility Act, the Mississippi PSC issued "Grandfather
Certificates" of convenience and necessity to MISSISSIPPI and to six
distribution rural cooperatives operating in southeastern Mississippi, then
served in whole or in part by MISSISSIPPI, authorizing them to distribute
electricity in certain specified geographically described areas of the state.
The six cooperatives serve approximately 300,000 retail customers in a
certificated area of approximately 10,300 square miles. In areas included in a
"Grandfather Certificate," the utility holding such certificate may, without
I-11
<PAGE>
further certification, extend its lines up to five miles; other extensions
within that area by such utility, or by other utilities, may not be made except
upon a showing of, and a grant of a certificate of, public convenience and
necessity. Areas included in such a certificate which are subsequently annexed
to municipalities may continue to be served by the holder of the certificate,
irrespective of whether it has a franchise in the annexing municipality. On the
other hand, the holder of the municipal franchise may not extend service into
such newly annexed area without authorization by the Mississippi PSC.
Long-Term Power Sales Agreements
Reference is made to Note 7 to the financial statements for SOUTHERN, ALABAMA,
GEORGIA, GULF and MISSISSIPPI and Note 6 to the financial statements for
SAVANNAH in Item 8 herein for information regarding contracts for the sales of
capacity and energy to non-territorial customers.
Competition
The electric utility industry in general has become, and is expected to continue
to be, increasingly competitive as the result of factors including regulatory
and technological developments. The Energy Act, enacted in 1992, was intended to
foster competition in the wholesale market by, among other things, facilitating
participation by independent power producers. The Energy Act includes provisions
authorizing the FERC under certain conditions to order utilities owning
transmission facilities to provide wholesale transmission services for other
utilities or entities that generate energy.
As a result of the foregoing factors, SOUTHERN has experienced increasing
competition for available off-system sales of capacity and energy from
neighboring utilities and alternative sources of energy. Additionally, the
future effect of cogeneration and small-power production facilities on the
SOUTHERN system cannot currently be determined but may be adverse.
ALABAMA currently has cogeneration contracts in effect with nine industrial
customers. Under the terms of these contracts, ALABAMA purchases excess
generation of such companies. During 1995, ALABAMA purchased approximately 115
million kilowatt-hours from such companies at a cost of $1.8 million.
GEORGIA currently has cogeneration contracts in effect with seven industrial
customers. Under the terms of these contracts, GEORGIA purchases excess
generation of such companies. During 1995, GEORGIA purchased 4 million
kilowatt-hours from such companies at a cost of $78,000. GEORGIA has entered
into a 30-year purchase power agreement, scheduled to begin in June 1998, for
electricity during peaking periods from a planned 300-megawatt cogeneration
facility. Payments are subject to reductions for failure to meet minimum
capacity output.
GULF currently has cogeneration agreements for "as available" energy in
effect with two industrial customers. During 1995, GULF purchased 214 million
kilowatt-hours from such companies for $3.6 million.
SAVANNAH currently has cogeneration contracts in effect with four industrial
customers. Under the terms of these contracts, SAVANNAH purchases excess
generation of such companies. During 1995, SAVANNAH purchased 1.5 million
kilowatt-hours from such companies at a cost of $34,000.
The competition for retail energy sales among competing suppliers of energy
is influenced by various factors, including price, availability, technological
advancements and reliability. These factors are, in turn, affected by, among
other influences, regulatory, political and environmental considerations,
taxation and supply.
The operating affiliates have experienced, and expect to continue to
experience, competition in their respective retail service territories in
varying degrees as the result of self-generation (as described above) and fuel
switching by customers and other factors. (See also Item 1 - BUSINESS -
"Territory Served" herein for information concerning suppliers of electricity
operating within or near the areas served at retail by the operating
affiliates.)
I-12
<PAGE>
In addition, while the Energy Act does not provide for "retail wheeling"
(i.e., the transmission and distribution by an electric utility to retail
customers within its service territory of energy produced by another entity),
applicable legislative and regulatory bodies may consider imposing such a
requirement in the future, the effect of which may be adverse or, conversely,
prove to be beneficial. New federal legislation is being discussed, and
legislation allowing customer choice has been introduced in Alabama, Florida and
Georgia. Some form of retail wheeling has been mandated in states such as
California and Michigan. Any form of retail wheeling which may be adopted would
need to address a variety of complex issues, including stranded investments and
the utility's obligation to serve a particular customer or customers. Reference
is made to each registrant's "Management's Discussion and Analysis - Future
Earnings Potential" in Item 7 herein for further discussion of competition.
In order to adapt to the increasingly competitive environment in which they
operate, SOUTHERN and the operating affiliates will evaluate and consider a wide
array of potential business strategies. These may include business combinations
or acquisitions involving other utility or non-utility businesses or properties,
internal restructurings or reorganizations involving SOUTHERN, the operating
affiliates or some combination thereof or dispositions of currently owned
properties or currently operated business units. In addition, SOUTHERN and the
operating affiliates may engage in new business ventures, such as power
marketing, which arise from competitive and regulatory changes in the utility
industry. Pursuit of any of the above strategies, or any combination thereof,
may significantly affect the business operations and financial condition of
SOUTHERN and the operating affiliates.
Regulation
State Commissions
The operating affiliates and SEGCO are subject to the jurisdiction of their
respective state regulatory commissions, which have broad powers of supervision
and regulation over public utilities operating in the respective states,
including their rates, service regulations, sales of securities (except for the
Mississippi PSC) and, in the cases of the Georgia PSC and Mississippi PSC, in
part, retail service territories. (See Item 1 - BUSINESS - "Rate Matters" and
"Territory Served" herein.)
Holding Company Act
SOUTHERN is registered as a holding company under the Holding Company Act, and
it and its subsidiary companies are subject to the regulatory provisions of said
Act, including provisions relating to the issuance of securities, sales and
acquisitions of securities and utility assets, services performed by SCS and
Southern Nuclear, and the activities of certain of SOUTHERN's special purpose
subsidiaries.
In June 1995, the Division of Investment Management of the SEC issued a
report on its study of the regulation of public-utility holding companies.
Concluding that significant changes in the current regulatory system are needed,
the report offers various legislative and administrative recommendations for
reform. The legislative option preferred by the Division in the report is repeal
of the Holding Company Act coupled with new provisions for state access to books
and records of holding company system companies and for federal audit authority
and oversight of intrasystem transactions. However, the prospects for further
legislative reform of the Holding Company Act are uncertain at this time.
Federal Power Act
The Federal Power Act subjects the operating affiliates and SEGCO to regulation
by the FERC as companies engaged in the transmission or sale at wholesale of
electric energy in interstate commerce, including regulation of accounting
policies and practices.
ALABAMA and GEORGIA are also subject to the provisions of the Federal Power
Act or the earlier Federal Water Power Act applicable to licensees with respect
to their hydroelectric developments. Among the hydroelectric projects subject to
licensing by the FERC are 14 existing ALABAMA generating stations having an
aggregate installed capacity of 1,582,725 kilowatts and 18 existing GEORGIA
generating stations having an aggregate installed capacity of 1,074,696
kilowatts.
I-13
<PAGE>
In December 1991, ALABAMA and GEORGIA filed with the FERC their applications
for new licenses on six of their existing hydroelectric projects. The six
projects, ALABAMA's Yates and Thurlow and GEORGIA's Lloyd Shoals, Langdale,
Riverview and North Georgia, totaling 272,340 kilowatts of capacity, had
licenses that expired December 31, 1993. Although the possibility of competition
existed for these licenses, no competing applications were filed prior to the
filing deadline of December 31, 1991. The Lloyd Shoals, Langdale and Riverview
projects were granted new 30-year licenses that expire on January 1, 2024. The
North Georgia project is operating on an annual license under the same terms and
conditions as its original license. Additionally, the FERC has issued an order
granting a combined, 40-year license for the Yates and Thurlow projects. As a
part of the application for the combined, 40-year license for the Yates and
Thurlow projects, ALABAMA agreed to expand the capacity of these units by a
total of approximately 10 megawatts.
In August 1995, GEORGIA filed with the FERC its application for a new
license for its Sinclair Project which has 45,000 kilowatts of capacity.
GEORGIA's current license for this project expires September 1, 1997. Certain
environmental issues raised during the licensing process may result in the FERC
including license terms and conditions that could have a substantial effect on
the peaking capability of the project.
In July 1994, flooding of the Flint River in and around Albany, Georgia and
the Flint River Project (5,400 kilowatts of capacity) resulted in substantial
damage to the dam and power house. Under the FERC oversight, GEORGIA has made
repairs to the facilities. In the event GEORGIA elects to file for a new license
for the Flint River Project, it is required to file a notice of intent with the
FERC by September 1996. GEORGIA will then be required to file an application for
a new license for such project by September 1999.
GEORGIA and OPC also have a license, expiring in 2027, for the Rocky
Mountain Plant, a pure pumped storage facility of 847,800 kilowatt capacity
which began commercial operation in 1995. (See Item 2 - PROPERTIES -
"Jointly-Owned Facilities" herein and Note 3 to SOUTHERN's and GEORGIA's
financial statements in Item 8 herein for additional information.)
Licenses for all projects, excluding those discussed above, expire in the
period 2007-2023 in the case of ALABAMA's projects and in the period 2005-2020
in the case of GEORGIA's projects.
Upon or after the expiration of each license, the United States Government,
by act of Congress, may take over the project, or the FERC may relicense the
project either to the original licensee or to a new licensee. In the event of
takeover or relicensing to another, the original licensee is to be compensated
in accordance with the provisions of the Federal Power Act, such compensation to
reflect the net investment of the licensee in the project, not in excess of the
fair value of the property taken, plus reasonable damages to other property of
the licensee resulting from the severance therefrom of the property taken.
Atomic Energy Act of 1954
ALABAMA, GEORGIA and Southern Nuclear are subject to the provisions of the
Atomic Energy Act of 1954, as amended, which vests jurisdiction in the NRC over
the construction and operation of nuclear reactors, particularly with regard to
certain public health and safety and antitrust matters. The National
Environmental Policy Act has been construed to expand the jurisdiction of the
NRC to consider the environmental impact of a facility licensed under the Atomic
Energy Act of 1954, as amended.
Reference is made to Notes 1 and 13 to SOUTHERN's, Notes 1 and 11 to
ALABAMA's and Notes 1 and 5 to GEORGIA's financial statements in Item 8 herein
for information on nuclear decommissioning costs and nuclear insurance.
Additionally, Note 3 to GEORGIA's financial statements contains information
regarding nuclear performance standards imposed by the Georgia PSC that may
impact retail rates.
Environmental Regulation
The operating affiliates and SEGCO are subject to federal, state and local
environmental requirements which, among other things, control emissions of
particulates, sulfur dioxide and nitrogen oxides into the air; the use,
transportation, storage and disposal of hazardous and toxic waste; and
discharges of pollutants, including thermal discharges, into waters of the
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<PAGE>
United States. The operating affiliates and SEGCO expect to comply with such
requirements, which generally are becoming increasingly stringent, through
technical improvements, the use of appropriate combinations of low-sulfur fuel
and chemicals, addition of environmental control facilities, changes in control
techniques and reduction of the operating levels of generating facilities.
Failure to comply with such requirements could result in the complete shutdown
of individual facilities not in compliance as well as the imposition of civil
and criminal penalties.
Reference is made to each registrant's "Management's Discussion and
Analysis" in Item 7 herein for a discussion of the Clean Air Act and other
environmental legislation and proceedings.
Possible adverse health effects of EMFs from various sources, including
transmission and distribution lines, have been the subject of a number of
studies and increasing public discussion. The scientific research currently is
inconclusive as to whether EMFs may cause adverse health effects. However, there
is the possibility of passage of legislation and promulgation of rulemaking that
would require measures to mitigate EMFs, with resulting increases in capital and
operating costs. In addition, the potential exists for public liability with
respect to lawsuits brought by plaintiffs alleging damages caused by EMFs.
The operating affiliates' and SEGCO's estimated capital expenditures for
environmental quality control facilities for the years 1996, 1997 and 1998 are
as follows: (in millions)
-------------------------------------------------------
1996 1997 1998
-----------------------------------
ALABAMA $29.8 $31.0 $30.3
GEORGIA 19.4 21.9 25.4
GULF 1.9 5.8 4.1
MISSISSIPPI 1.1 1.5 2.7
SAVANNAH 2.1 0.8 1.3
SEGCO 8.5 1.0 -
-----------------------------------
SOUTHERN
system $62.8 $62.0 $63.8
=======================================================
*The foregoing estimates are included in the current construction programs.
(See Item 1 - BUSINESS - "Construction Programs" herein.)
Additionally, each operating affiliate and SEGCO have incurred costs for
environmental remediation of various sites. Reference is made to each
registrant's "Management's Discussion and Analysis" in Item 7 herein for
information regarding the registrants' environmental remediation efforts. Also,
see Note 3 to SOUTHERN's and GEORGIA's financial statements in Item 8 herein for
information regarding the identification of sites that may require environmental
remediation by GEORGIA and Note 3 to MISSISSIPPI's financial statements in Item
8 herein for information regarding a site that may require environmental
remediation by MISSISSIPPI.
The operating affiliates and SEGCO are unable to predict at this time what
additional steps they may be required to take as a result of the implementation
of existing or future quality control requirements for air, water and hazardous
or toxic materials, but such steps could adversely affect system operations and
result in substantial additional costs.
The outcome of the matters mentioned above under "Regulation" cannot now be
determined, except that these developments may result in delays in obtaining
appropriate licenses for generating facilities, increased construction and
operating costs, or reduced generation, the nature and extent of which, while
not determinable at this time, could be substantial.
Rate Matters
Rate Structure
The rates and service regulations of the operating affiliates are uniform for
each class of service throughout their respective service areas. Rates for
residential electric service are generally of the block type based upon
kilowatt-hours used and include minimum charges.
Residential and other rates contain separate customer charges. Rates for
commercial service are presently of the block type and, for large customers, the
billing demand is generally used to determine capacity and minimum bill charges.
These large customers' rates are generally based upon usage by the customer
including those with special features to encourage off-peak usage. Additionally,
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<PAGE>
the operating affiliates are allowed by their respective PSCs to negotiate the
terms and compensation of service to large customers. Such terms and
compensation of service, however, are subject to final PSC approval. With
respect to MISSISSIPPI's retail rates, fuel and purchased power costs above base
levels included in the various rate schedules are billed to such customers under
the fuel and energy adjustment clause. GULF recovers from retail customers fuel
and net purchased power costs through provisions which are adjusted to reflect
increases or decreases in such costs. ALABAMA, GEORGIA and SAVANNAH are allowed
by state law to recover fuel and net purchased energy costs through fuel cost
recovery provisions which are adjusted to reflect increases or decreases in such
costs. GULF's recovery of fuel costs is based upon a projection for six-months;
any over/under recovery during such period is reflected in a subsequent
six-month period with interest. GULF's recovery of purchased power capacity
costs is based upon an annual projection; any over/under recovery during such
period is reflected in a subsequent annual period with interest. The adjustment
factors for MISSISSIPPI's retail and wholesale rates are levelized based on the
estimated energy cost for the year, adjusted for any actual over/under
collection from the previous year. Revenues are adjusted for differences between
recoverable fuel costs and amounts actually recovered in current rates.
Rate Proceedings
Reference is made to Note 3 to each registrant's financial statements in Item 8
herein for a discussion of rate matters. For each registrant (except SAVANNAH),
such Note 3 includes a discussion of proceedings initiated by the FERC
concerning the reasonableness of the Southern electric system's wholesale rate
schedules and contracts that have a return on equity of 13.75% or greater.
In 1995, GULF filed a petition with the Florida PSC seeking approval for an
optional rate rider, which would be applicable to GULF's largest and most
at-risk customers. For additional information, reference is made to GULF's
"Management's Discussion and Analysis - Future Earnings Potential" in Item 7
herein.
Integrated Resource Planning
In 1991, the Georgia legislature passed certain legislation under which both
GEORGIA and SAVANNAH must file Integrated Resource Plans for approval by the
Georgia PSC. The plans must specify how GEORGIA and SAVANNAH each intends to
meet the future electrical needs of their customers through a combination of
demand-side and supply-side resources. The Georgia PSC must pre-certify these
new resources. Once certified, all prudently incurred construction costs will be
recoverable through rates.
By orders issued in 1992 and by amended orders issued in 1995, the Georgia
PSC approved Integrated Resource Plans for both GEORGIA and SAVANNAH. (See Note
3 to SOUTHERN's and GEORGIA's financial statements in Item 8 herein for
information regarding GEORGIA's demand-side option programs and Note 3 to
SAVANNAH's financial statements for information regarding SAVANNAH's demand-side
option programs.)
The Florida PSC has set energy conservation goals for GULF, which became
effective in 1995, that require programs to reduce 154 megawatts of summer peak
demand and 65,000 kilowatt-hours of sales by the year 2004. For additional
information, reference is made to GULF's "Management's Discussion and Analysis -
Future Earnings Potential" in Item 7 herein.
Environmental Cost Recovery Plans
GULF and MISSISSIPPI both have retail rate mechanisms that provide for recovery
of environmental compliance costs. For a description of these plans, see Note 3
to GULF's and MISSISSIPPI's financial statements in Item 8 herein.
I-16
<PAGE>
Employee Relations
The companies of the SOUTHERN system had a total of 31,882 employees on their
payrolls at December 31, 1995.
-------------------------------------------------
Employees
at
December 31, 1995
-----------------------
ALABAMA 7,261
GEORGIA 11,061
GULF 1,501
MISSISSIPPI 1,421
SAVANNAH 584
SCS 3,207
Southern Nuclear 1,298
Communications 78
Southern Development 41
SEI* 5,430
-------------------------------------------------
Total 31,882
=================================================
*Includes 4,977 employees on international payrolls.
The operating affiliates have separate agreements with local unions of the
IBEW generally covering wages, working conditions and procedures for handling
grievances and arbitration. These agreements apply with certain exceptions to
operating, maintenance and construction employees.
ALABAMA has agreements with the IBEW on a three-year contract extending to
August 15, 1998. Upon notice given at least 60 days prior to that date,
negotiations may be initiated with respect to agreement terms to be effective
after such date.
GEORGIA has an agreement with the IBEW covering wages and working
conditions, which is in effect through June 30, 1996, and is currently in
negotiations with respect to such agreement. GEORGIA also has a contract with
the United Plant Guard Workers of America with respect to Plant Hatch which
extends through September 30, 1998.
GULF has an agreement with the IBEW on a three-year contract extending to
August 15, 1998.
In July 1995, MISSISSIPPI and the IBEW began negotiating changes to the
contract which extended to August 16, 1995. Due to ongoing negotiations, the
parties agreed to extend the contract beyond August 16, 1995. Discussions
continued into 1996, with union ratification in March.
Southern Nuclear has an agreement with the IBEW on a three-year contract
extending to August 15, 1998. Upon notice given at least 60 days prior to that
date, negotiations may be initiated with respect to agreement terms to be
effective after such date.
The agreements also subject the terms of the pension plans for the companies
discussed above to collective bargaining with the unions at five-year intervals.
SAVANNAH has three-year labor agreements with the IBEW and the Office and
Professional Employees International Union that expire April 16, 1996 and
December 1, 1996, respectively. SAVANNAH is currently in negotiations with the
IBEW.
SEI has agreements with local unions of the IBEW and the United Paperworkers
International Union which covers employees of Mobile Energy. These agreements
extend to May 31, 1997.
I-17
<PAGE>
Item 2. PROPERTIES
Electric Properties
The operating affiliates and SEGCO, at December 31, 1995, operated 33
hydroelectric generating stations, 32 fossil fuel generating stations and three
nuclear generating stations. The amounts of capacity owned by each company are
shown in the table below.
------------------------------------------------------------
Nameplate
Generating Station Location Capacity (1)
------------------------------------------------------------
(Kilowatts)
Fossil Steam
Gadsden Gadsden, AL 120,000
Gorgas Jasper, AL 1,221,250
Barry Mobile, AL 1,525,000
Chickasaw Chickasaw, AL 40,000
Greene County Demopolis, AL 300,000 (2)
Gaston Unit 5 Wilsonville, AL 880,000
Miller Birmingham, AL 2,532,288 (3)
---------
ALABAMA Total 6,618,538
---------
Arkwright Macon, GA 160,000
Atkinson Atlanta, GA 180,000
Bowen Cartersville, GA 3,160,000
Branch Milledgeville, GA 1,539,700
Hammond Rome, GA 800,000
McDonough Atlanta, GA 490,000
McManus Brunswick, GA 115,000
Mitchell Albany, GA 170,000
Scherer Macon, GA 750,924 (4)
Wansley Carrollton, GA 925,550 (5)
Yates Newnan, GA 1,250,000
---------
GEORGIA Total 9,541,174
---------
Crist Pensacola, FL 1,045,000
Lansing Smith Panama City, FL 305,000
Scholz Chattahoochee, FL 80,000
Daniel Pascagoula, MS 500,000 (6)
Scherer Unit 3 Macon, GA 204,500 (4)
---------
GULF Total 2,134,500
---------
Eaton Hattiesburg, MS 67,500
Sweatt Meridian, MS 80,000
Watson Gulfport, MS 1,012,000
Daniel Pascagoula, MS 500,000 (6)
Greene County Demopolis, AL 200,000 (2)
-----------
MISSISSIPPI Total 1,859,500
-----------
----------------------------------------------------------------
----------------------------------------------------------------
Nameplate
Generating Station Location Capacity
----------------------------------------------------------------
(Kilowatts)
McIntosh Effingham County, GA 163,117
Kraft Port Wentworth, GA 281,136
Riverside Savannah, GA 102,278
------------
SAVANNAH Total 546,531
------------
Gaston Units 1-4 Wilsonville, AL
(SEGCO) 1,000,000 (7)
------------
Total Fossil Steam 21,700,243
------------
Nuclear Steam
Farley Dothan, AL
(ALABAMA) 1,720,000
------------
Hatch Baxley, GA 816,630 (8)
Vogtle Augusta, GA 1,060,240 (9)
------------
GEORGIA Total 1,876,870
------------
Total Nuclear Steam 3,596,870
------------
Combustion Turbines
Greene County Demopolis, AL
(ALABAMA) 400,000
-----------
Arkwright Macon, GA 30,580
Atkinson Atlanta, GA 78,720
Bowen Cartersville, GA 39,400
McDonough Atlanta, GA 78,800
McIntosh
Units 1,2,3,4,7,8 Effingham County, GA 480,000
McManus Brunswick, GA 481,700
Mitchell Albany, GA 118,200
Robins Warner Robins, GA 160,000
Wilson Augusta, GA 354,100
Wansley Carrollton, GA 26,322 (5)
-----------
GEORGIA Total 1,847,822
-----------
Lansing Smith
Unit A (GULF) Panama City, FL 39,400
Chevron Cogenerating
Station Pascagoula, MS 147,292 (10)
Sweatt Meridian, MS 39,400
Watson Gulfport, MS 39,360
-----------
MISSISSIPPI Total 226,052
-----------
Boulevard Savannah, GA 59,100
Kraft Port Wentworth, GA 22,000
McIntosh
Units 5&6 Effingham County, GA 160,000
-----------
SAVANNAH Total 241,100
-----------
----------------------------------------------------------------
I-18
<PAGE>
----------------------------------------------------------------
Nameplate
Generating Station Location Capacity
----------------------------------------------------------------
(Kilowatts)
Gaston (SEGCO) Wilsonville, AL 19,680 (7)
-----------
Total Combustion Turbines 2,774,054
-----------
Hydroelectric Facilities
Weiss Leesburg, AL 87,750
Henry Ohatchee, AL 72,900
Logan Martin Vincent, AL 128,250
Lay Clanton, AL 177,000
Mitchell Verbena, AL 170,000
Jordan Wetumpka, AL 100,000
Bouldin Wetumpka, AL 225,000
Harris Wedowee, AL 135,000
Martin Dadeville, AL 154,200
Yates Tallassee, AL 32,000
Thurlow Tallassee, AL 58,000
Lewis Smith Jasper, AL 157,500
Bankhead Holt, AL 45,125
Holt Holt, AL 40,000
----------
ALABAMA Total 1,582,725
----------
Barnett Shoals
(Leased) Athens, GA 2,800
Bartletts Ferry Columbus, GA 173,000
Goat Rock Columbus, GA 26,000
Lloyd Shoals Jackson, GA 14,400
Morgan Falls Atlanta, GA 16,800
North Highlands Columbus, GA 29,600
Oliver Dam Columbus, GA 60,000
Rocky Mountain Rome, GA 215,256 (11)
Sinclair Dam Milledgeville, GA 45,000
Tallulah Falls Clayton, GA 72,000
Terrora Clayton, GA 16,000
Tugalo Clayton, GA 45,000
Wallace Dam Eatonton, GA 321,300
Yonah Toccoa, GA 22,500
6 Other Plants 18,080
-----------
GEORGIA Total 1,077,736
-----------
Total Hydroelectric Facilities 2,660,461
-----------
Total Generating Capacity 30,731,628
===========
---------------------------------------------------------------
Notes:
(1) For additional information regarding facilities jointly-owned with
non-affiliated parties, see Item 2 - PROPERTIES - "Jointly-Owned
Facilities" herein.
(2) Owned by ALABAMA and MISSISSIPPI as tenants in common in the
proportions of 60% and 40%, respectively.
(3) Excludes the capacity owned by AEC.
(4) Capacity shown for GEORGIA is 8.4% of Units 1 and 2 and 75% of Unit 3.
Capacity shown for GULF is 25% of Unit 3.
(5) Capacity shown is GEORGIA's portion (53.5%) of total plant capacity.
(6) Represents 50% of the plant which is owned as tenants in common by
GULF and MISSISSIPPI.
(7) SEGCO is jointly-owned by ALABAMA and GEORGIA. (See Item 1 - BUSINESS
herein.)
(8) Capacity shown is GEORGIA's portion (50.1%) of total plant capacity.
(9) Capacity shown is GEORGIA's portion (45.7%) of total plant capacity.
(10) Generation is dedicated to a single industrial customer.
(11) Capacity shown is GEORGIA's portion (25.4%) of total plant capacity.
OPC operates the plant.
Except as discussed below under "Titles to Property," the principal plants
and other important units of the SOUTHERN system are owned in fee by the
operating affiliates and SEGCO. It is the opinion of management of each such
company that its operating properties are adequately maintained and are
substantially in good operating condition.
MISSISSIPPI owns a 79-mile length of 500-kilovolt transmission line which is
leased to Gulf States. The line, completed in 1984, extends from Plant Daniel to
the Louisiana state line. Gulf States is paying a use fee over a forty-year
period covering all expenses and the amortization of the original $57 million
cost of the line.
The all-time maximum demand on the SOUTHERN system was 27,419,700 kilowatts
and occurred in August 1995. This amount excludes demand served by capacity
retained by MEAG and Dalton and excludes demand associated with power purchased
from OPC and SEPA by its preference customers. At that time, 29,596,100
kilowatts were supplied by SOUTHERN system generation and 2,176,400 kilowatts
(net) were sold to other parties through net purchased and interchanged power.
The reserve margin for the Southern electric system at that time was 9.4%. For
additional information on peak demands, reference is made to Item 6 SELECTED
FINANCIAL DATA herein.
I-19
<PAGE>
ALABAMA and GEORGIA will incur significant costs in decommissioning their
nuclear units at the end of their useful lives. (See Item 1 - BUSINESS
"Regulation - Atomic Energy Act of 1954" and Note 1 to SOUTHERN's, ALABAMA's
and GEORGIA's financial statements in Item 8 herein.)
Other Electric Generation Facilities
Through special purpose subsidiaries, SOUTHERN owns interests in or operates
independent power production facilities and foreign utility companies. The
generating capacity of these utilities (or facilities) at December 31, 1995, was
as follows:
<TABLE>
<CAPTION>
Facilities in Operation
- - --------------------------------------------------------------------------------------------------------------
Megawatts of Capacity
------------------------ Percent
Facility Location Units Owned Operated Ownership Type
- - ----------------- ---------------------- ------- ----------- ------------ ------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Alicura Argentina 4 551 (1) 1,000 55.14 (1) Hydro
Edelnor Chile 27 55 86 65.00 Oil
Edelnor Chile 2 7 10 65.00 Hydro
Freeport Grand Bahamas 5 56 113 50.00 Oil & Gas
Goodyear New York 1 - 50 - Coal (2)
Kalaeloa Hawaii 1 60 180 33.33 Oil (2)
Las Vegas Nevada 1 - 50 - Gas (2)
Mobile Energy Alabama 3 111 111 100.00 Waste/Biomass (2)
Penal Trinidad and Tobago 5 92 236 39.00 Gas
Port of Spain Trinidad and Tobago 6 120 308 39.00 Gas
Pt. Lisas Trinidad and Tobago 10 247 634 39.00 Gas
SWEB United Kingdom 8 144 - 7.70 Gas
SWEB United Kingdom 13 19 19 100.00 Oil & Gas
SWEB United Kingdom 3 8 8 38.27 Wind
==============================================================================================================
Total Capacity 1,470 2,805
==============================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Facilities Under Development
- - --------------------------------------------------------------------------------------------------------------
Megawatts of Capacity
------------------------- Percent
Facility Location Own Operate Ownership Type
- - ----------------- ----------------------- ------------ ------------ ---------------- -----------------
<S> <C> <C> <C> <C> <C>
Birchwood Virginia 110 220 50.00 Coal (2)
Edelnor Chile 208 320 65.00 Coal
==============================================================================================================
Total Capacity 318 540
==============================================================================================================
Notes: (1) Represents megawatts of capacity under a concession agreement expiring in the year 2023.
(2) Cogeneration facility.
</TABLE>
I-20
<PAGE>
Jointly-Owned Facilities
ALABAMA and GEORGIA have sold and GEORGIA has purchased undivided interests in
certain generating plants and other related facilities to or from non-affiliated
parties. The percentages of ownership resulting from these transactions are as
follows:
<TABLE>
<CAPTION>
Percentage Ownership
Total -------------------------------------------------
Capacity ALABAMA AEC GEORGIA OPC MEAG DALTON FPC
----------- -------------------------------------------------
(Megawatts)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Plant Miller
Units 1 and 2 1,320 91.8% 8.2% -% -% -% -% -%
Plant Hatch 1,630 - - 50.1 30.0 17.7 2.2 -
Plant Vogtle 2,320 - - 45.7 30.0 22.7 1.6 -
Plant Scherer
Units 1 and 2 1,636 - - 8.4 60.0 30.2 1.4 -
Plant Wansley 1,779 - - 53.5 30.0 15.1 1.4 -
Rocky Mountain 848 - - 25.4 74.6 - - -
Intercession City, FL 150 - - 33.3* - - - 66.7
- - -----------------------------------------------------------------------------------
*Estimated ownership at completion.
</TABLE>
ALABAMA and GEORGIA have contracted to operate and maintain the respective
units in which each has an interest (other than Rocky Mountain and Intercession
City, as described below) as agent for the joint owners.
In connection with the joint ownership arrangements for Plant Vogtle,
GEORGIA has remaining commitments to purchase declining fractions of MEAG's
capacity and energy until December 1996 for Unit 2 and, with regard to a portion
of a 5% interest owned by MEAG, until the latter of the retirement of the plant
or the latest stated maturity date of MEAG's bonds issued to finance such
ownership interest. The payments for capacity are required whether any capacity
is available. The energy cost is a function of each unit's variable operating
costs. Except for the portion of the capacity payments related to the 1987 and
1990 write-offs of Plant Vogtle costs, the cost of such capacity and energy is
included in purchased power from non-affiliates in GEORGIA's Statements of
Income in Item 8 herein.
In December 1988, GEORGIA and OPC entered into a joint ownership agreement
for the Rocky Mountain plant under which GEORGIA agreed to retain its present
investment in the project and OPC agreed to finance, complete and operate the
facility. The plant went into commercial operation in 1995. GEORGIA's net
investment in the plant is approximately $190 million, and GEORGIA's ownership
is 25.4 percent. Reference is made to Note 3 to SOUTHERN's and GEORGIA's
financial statements in Item 8 herein for additional information regarding the
Rocky Mountain plant.
In 1994, GEORGIA and FPC entered into a joint ownership agreement regarding
the Intercession City combustion turbine unit. The unit is scheduled to be in
commercial operation by the end of 1996, and will be constructed, operated, and
maintained by FPC. GEORGIA will have a one-third interest in the 150-megawatt
unit, with use of 100% of the capacity from June through September. FPC will
have the capacity the remainder of the year. GEORGIA's investment in the unit at
completion is estimated to be $14 million. Also, GEORGIA entered into a separate
four-year purchase power contract with FPC. Beginning in 1996, GEORGIA will
purchase 400 megawatts of capacity. In 1998, this amount will decline to 200
megawatts for the remaining two years.
Sale of Property
Reference is made to Note 6 to SOUTHERN's and GEORGIA's financial statements in
Item 8 herein for information regarding the sale completed in 1995 of GEORGIA's
remaining ownership interest in Plant Scherer Unit 4.
I-21
<PAGE>
Titles to Property
The operating affiliates' and SEGCO's interests in the principal plants (other
than certain pollution control facilities, one small hydroelectric generating
station leased by GEORGIA and the land on which four combustion turbine
generators of MISSISSIPPI are located, which is held by easement) and other
important units of the respective companies are owned in fee by such companies,
subject only to the liens of applicable mortgage indentures (except for SEGCO)
and to excepted encumbrances as defined therein. The operating affiliates own
the fee interests in certain of their principal plants as tenants in common.
(See Item 2 - PROPERTIES - "Jointly-Owned Facilities" herein.) Properties such
as electric transmission and distribution lines and steam heating mains are
constructed principally on rights-of-way which are maintained under franchise or
are held by easement only. A substantial portion of lands submerged by
reservoirs is held under flood right easements. In substantially all of its coal
reserve lands, SEGCO owns or will own the coal only, with adequate rights for
the mining and removal thereof.
Property Additions and Retirements
During the period from January 1, 1991 to December 31, 1995, the operating
affiliates, SEGCO, SCS, Southern Nuclear, Communications and SEI recorded gross
property additions and retirements as follows:
==================================================
Gross Property
Additions Retirements
--------------- -------------
(in millions)
ALABAMA (1) $2,290 $ 357
GEORGIA (2) 2,850 1,864
GULF 350 125
MISSISSIPPI 433 82
SAVANNAH 179 16
SEGCO 60 14
SCS 111 122
Southern Nuclear 17 4
Communications 162 -
SEI 154 6
- - --------------------------------------------------
SOUTHERN system $6,606 $2,590
==================================================
Notes:
(1) Includes approximately $62 million attributable to sale of 8.2%
interest in Plant Miller Units 1 and 2 to AEC in 1992.
(2) Includes approximately $691 million attributable to 1991 through 1995
sales of Plant Scherer Unit 4 to FP&L and JEA.
I-22
<PAGE>
Item 3. LEGAL PROCEEDINGS
(1) Stepak v. certain SOUTHERN officials
(U.S. District Court for the Southern District of Georgia)
Reference is made to Note 3 to SOUTHERN's financial statements in Item 8
herein under the caption "Stockholder Suit."
(2) SOUTHERN and Subsidiaries v. Commissioner of the IRS
(U.S. Tax Court)
In June 1994, a tax deficiency notice was received from the IRS for the
years 1984 through 1987 with regard to the tax accounting by GEORGIA for
the sale in 1984 of an interest in Plant Vogtle and related capacity and
energy buyback commitments. The potential tax deficiency and interest
arising from this issue currently amount to approximately $25 million and
$31 million, respectively. The tax deficiency relates to a timing issue
as to when taxes are paid; therefore, only the interest portion could
affect future income. Management believes that the IRS position is
incorrect, and GEORGIA has filed a petition with the U.S. Tax Court
challenging the IRS's position. In order to minimize additional interest
charges should the IRS's position prevail, GEORGIA made a payment to the
IRS related to the potential tax deficiency in September 1994.
(3) ALABAMA, GEORGIA and MISSISSIPPI v. TVA, et al.
(U.S. District Court for the Northern District of Alabama)
On January 12, 1996, ALABAMA, GEORGIA and MISSISSIPPI filed an action
seeking to enjoin the TVA from violating a 1959 act which prohibits the
TVA from selling power outside the area that was being served by it in
1957. LG&E Power Marketing, Inc. (LPM), also a defendant, has entered
into an agreement with TVA for the sale of power purchased by LPM from
TVA to organizations outside the TVA's statutorily defined service
territory, which the plaintiffs contend is in violation of the 1959 act.
(4) GEORGIA has been designated as a potentially responsible party under the
Comprehensive Environmental Response, Compensation and Liability Act with
respect to a site in Brunswick, Georgia.
Reference is made to Note 3 to SOUTHERN's and GEORGIA's financial
statements in Item 8 herein under the captions "Georgia Power Potentially
Responsible Party Status" and "Certain Environmental Contingencies,"
respectively.
See Item 1 - BUSINESS - "Construction Programs," "Fuel Supply," "Regulation
- - - Federal Power Act" and "Rate Matters" as well as Note 3 to each registrant's
financial statements in Item 8 herein for a description of certain other
administrative and legal proceedings discussed therein.
Additionally, each of the operating affiliates, SEI, SCS, Southern Nuclear,
Southern Development and Communications are, in the normal course of business,
engaged in litigation or administrative proceedings that include, but are not
limited to, acquisition of property, injuries and damages claims, and complaints
by present and former employees.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
I-23
<PAGE>
EXECUTIVE OFFICERS OF SOUTHERN
(Identification of executive officers of SOUTHERN is inserted in Part I in
accordance with Regulation S-K, Item 401(b), Instruction 3.) The ages of the
officers set forth below are as of December 31, 1995.
A. W. Dahlberg
Chairman, President and Chief Executive Officer
Age 55
Elected in 1985; President and Chief Executive Officer of GEORGIA from 1988
through 1993. He was elected Executive Vice President of SOUTHERN in 1991. He
was elected President of SOUTHERN effective January 1994. He was elected
Chairman and Chief Executive Officer effective March 1995.
Paul J. DeNicola
Executive Vice President and Director
Age 47
Elected in 1989; Executive Vice President of SOUTHERN since 1991. Elected
President and Chief Executive Officer of SCS effective January 1994. He
previously served as Executive Vice President of SCS from 1991 to 1993 and
President and Chief Executive Officer of MISSISSIPPI from 1989 to 1991.
H. Allen Franklin
Executive Vice President and Director
Age 51
Elected in 1988; President and Chief Executive Officer of SCS from 1988 through
1993 and, beginning 1991, Executive Vice President of SOUTHERN. He was elected
President and Chief Executive Officer of GEORGIA effective January 1994.
Elmer B. Harris
Executive Vice President and Director
Age 56
Elected in 1989; President and Chief Executive Officer of ALABAMA since 1989
and, beginning 1991, Executive Vice President of SOUTHERN.
David M. Ratcliffe
Senior Vice President
Age 47
Elected in 1995; President and Chief Executive Officer of MISSISSIPPI from 1991
to 1995. He also serves as Executive Vice President of SCS beginning in 1995 and
previously held that position from 1989 to 1991.
W. L. Westbrook
Financial Vice President, Chief Financial Officer and Treasurer
Age 56
Elected in 1986; responsible primarily for all aspects of financing for
SOUTHERN. He has served as Executive Vice President of SCS since 1986.
Thomas G. Boren
Vice President
Age 46
Elected in 1995; President and Chief Executive Officer of SEI since 1992. He
previously served as Senior Vice President of GEORGIA from 1989 to 1992.
Bill M. Guthrie
Vice President
Age 62
Elected in 1991; serves as Chief Production Officer for the SOUTHERN system.
Senior Executive Vice President of SCS effective January 1994 and Executive Vice
President of ALABAMA since 1988. He also serves as Executive Vice President of
GEORGIA and Vice President of GULF, MISSISSIPPI and SAVANNAH.
W. G. Hairston, III
Age 51
President and Chief Executive Officer of Southern Nuclear since 1993. He has
also served as Executive Vice President of GEORGIA since 1989.
Each of the above is currently an officer of SOUTHERN, except Mr. Hairston,
serving a term running from the last annual meeting of the directors (July 17,
1995) for one year until the next annual meeting or until his successor is
elected and qualified.
I-24
<PAGE>
PART II
Item 5. MARKET FOR REGISTRANTS' COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
(a) The common stock of SOUTHERN is listed and traded on the New York
Stock Exchange. The stock is also traded on regional exchanges across
the United States. High and low stock prices, per the New York Stock
Exchange Composite Tape and as adjusted to reflect a two-for-one
stock split in the form of a stock distribution for each share held
as of February 7, 1994, during each quarter for the past two years
were as follows:
------------------------------------------
High Low
----------- --------
1995
First Quarter $21-1/2 $19-3/8
Second Quarter 22-7/8 20-1/8
Third Quarter 24 21-1/8
Fourth Quarter 25 22-3/4
1994
First Quarter $22 $18-1/2
Second Quarter 20-1/2 17-3/4
Third Quarter 20 17
Fourth Quarter 21 18-1/4
-------------------------------------------
There is no market for the other registrants' common stock, all of
which is owned by SOUTHERN. On February 29, 1996, the closing price
of SOUTHERN's common stock was $23-7/8.
(b) Number of SOUTHERN's common stockholders at December 31, 1995:
225,739
Each of the other registrants have one common stockholder, SOUTHERN.
(c) Dividends on each registrant's common stock are payable at the
discretion of their respective board of directors. The dividends on
common stock paid and/or declared by SOUTHERN and the operating
affiliates to their stockholder(s) for the past two years were as
follows: (in thousands)
----------------------------------------------------
Registrant Quarter 1995 1994
----------------------------------------------------
SOUTHERN First $201,866 $191,262
Second 203,060 191,262
Third 203,061 191,475
Fourth 203,178 192,758
ALABAMA First 71,900 66,500
Second 69,500 67,000
Third 69,300 66,900
Fourth 74,300 67,600
GEORGIA First 113,900 106,600
Second 110,200 107,200
Third 109,700 107,200
Fourth 117,700 108,300
GULF First 11,700 10,900
Second 11,300 11,000
Third 11,300 11,000
Fourth 12,100 11,100
MISSISSIPPI First 9,900 8,500
Second 9,600 8,500
Third 9,600 8,500
Fourth 10,300 8,600
SAVANNAH First 4,400 4,100
Second 4,300 4,100
Third 4,300 4,100
Fourth 4,600 4,000
----------------------------------------------------
In January 1994, SOUTHERN's board of directors authorized a two-for-one
common stock split in the form of a stock distribution for each share held as of
February 7, 1994. For all reported common stock data, the number of common
shares outstanding and per share amounts for earnings, dividends, and market
price have been adjusted to reflect the stock distribution.
II-1
<PAGE>
The dividend paid per share by SOUTHERN was 29.5(cent) for each quarter of
1994 and 30.5(cent) for each quarter of 1995. The dividend paid on SOUTHERN's
common stock for the first quarter of 1996 was raised to 31.5(cent) per share.
The amount of dividends on their common stock that may be paid by the
subsidiary registrants is restricted in accordance with their respective first
mortgage bond indenture and charter. The amounts of earnings retained in the
business and the amounts restricted against the payment of cash dividends on
common stock at December 31, 1995, were as follows:
- - ---------------------------------------------
Retained Restricted
Earnings Amount
--------------------------
(in millions)
ALABAMA $1,161 $ 807
GEORGIA 1,570 897
GULF 180 101
MISSISSIPPI 157 118
SAVANNAH 105 62
Consolidated 3,483 1,990
- - ---------------------------------------------
Item 6. SELECTED FINANCIAL DATA
SOUTHERN. Reference is made to information under the heading "Selected
Consolidated Financial and Operating Data," contained herein at pages II-39
through II-50.
ALABAMA. Reference is made to information under the heading "Selected
Financial and Operating Data," contained herein at pages II-79 through II-92.
GEORGIA. Reference is made to information under the heading "Selected
Financial and Operating Data," contained herein at pages II-126 through II-140.
GULF. Reference is made to information under the heading "Selected
Financial and Operating Data," contained herein at pages II-170 through II-183.
MISSISSIPPI. Reference is made to information under the heading "Selected
Financial and Operating Data," contained herein at pages II-210 through II-223.
SAVANNAH. Reference is made to information under the heading "Selected
Financial and Operating Data," contained herein at pages II-246 through II-258.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
SOUTHERN. Reference is made to information under the heading "Management's
Discussion and Analysis of Results of Operations and Financial Condition,"
contained herein at pages II-8 through II-15.
ALABAMA. Reference is made to information under the heading "Management's
Discussion and Analysis of Results of Operations and Financial Condition,"
contained herein at pages II-54 through II-60.
GEORGIA. Reference is made to information under the heading "Management's
Discussion and Analysis of Results of Operations and Financial Condition,"
contained herein at pages II-96 through II-103.
GULF. Reference is made to information under the heading "Management's
Discussion and Analysis of Results of Operations and Financial Condition,"
contained herein at pages II-144 through II-151.
MISSISSIPPI. Reference is made to information under the heading
"Management's Discussion and Analysis of Results of Operations and Financial
Condition," contained herein at pages II-187 through II-193.
SAVANNAH. Reference is made to information under the heading "Management's
Discussion and Analysis of Results of Operations and Financial Condition,"
contained herein at pages II-227 through II-232.
II-2
<PAGE>
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEX TO 1995 FINANCIAL STATEMENTS
<TABLE>
<S> <C>
Page
The Southern Company and Subsidiary Companies:
Report of Independent Public Accountants................................................................................ II-7
Consolidated Statements of Income for the Years Ended December 31, 1995, 1994 and 1993.................................. II-16
Consolidated Statements of Retained Earnings for the Years Ended
December 31, 1995, 1994 and 1993...................................................................................... II-16
Consolidated Statements of Cash Flows for the Years Ended December 31, 1995, 1994 and 1993.............................. II-17
Consolidated Balance Sheets at December 31, 1995 and 1994............................................................... II-18
Consolidated Statements of Capitalization at December 31, 1995 and 1994................................................. II-20
Consolidated Statements of Paid-In Capital for the Years Ended December 31, 1995, 1994 and 1993......................... II-21
Notes to Financial Statements........................................................................................... II-22
ALABAMA:
Report of Independent Public Accountants .............................................................................. II-53
Statements of Income for the Years Ended December 31, 1995, 1994 and 1993............................................... II-61
Statements of Cash Flows for the Years Ended December 31, 1995, 1994 and 1993........................................... II-62
Balance Sheets at December 31, 1995 and 1994............................................................................ II-63
Statements of Capitalization at December 31, 1995 and 1994.............................................................. II-65
Statements of Retained Earnings for the Years Ended December 31, 1995, 1994 and 1993.................................... II-66
Notes to Financial Statements........................................................................................... II-67
GEORGIA:
Report of Independent Public Accountants................................................................................ II-95
Statements of Income for the Years Ended December 31, 1995, 1994 and 1993............................................... II-104
Statements of Cash Flows for the Years Ended December 31, 1995, 1994 and 1993........................................... II-105
Balance Sheets at December 31, 1995 and 1994............................................................................ II-106
Statements of Capitalization at December 31, 1995 and 1994.............................................................. II-108
Statements of Retained Earnings for the Years Ended December 31, 1995, 1994 and 1993.................................... II-109
Statements of Paid-In Capital for the Years Ended December 31, 1995, 1994 and 1993...................................... II-109
Notes to Financial Statements........................................................................................... II-110
GULF:
Report of Independent Public Accountants................................................................................ II-143
Statements of Income for the Years Ended December 31, 1995, 1994 and 1993............................................... II-152
Statements of Cash Flows for the Years Ended December 31, 1995, 1994 and 1993........................................... II-153
Balance Sheets at December 31, 1995 and 1994............................................................................ II-154
Statements of Capitalization at December 31, 1995 and 1994.............................................................. II-156
Statements of Retained Earnings for the Years Ended December 31, 1995, 1994 and 1993.................................... II-158
Statements of Paid-In Capital for the Years Ended December 31, 1995, 1994 and 1993...................................... II-158
Notes to Financial Statements........................................................................................... II-159
II-3
<PAGE>
Page
MISSISSIPPI:
Report of Independent Public Accountants................................................................................ II-186
Statements of Income for the Years Ended December 31, 1995, 1994 and 1993............................................... II-194
Statements of Cash Flows for the Years Ended December 31, 1995, 1994 and 1993........................................... II-195
Balance Sheets at December 31, 1995 and 1994............................................................................ II-196
Statements of Capitalization at December 31, 1995 and 1994.............................................................. II-198
Statements of Retained Earnings for the Years Ended December 31, 1995, 1994 and 1993.................................... II-199
Statements of Paid-In Capital for the Years Ended December 31, 1995, 1994 and 1993...................................... II-199
Notes to Financial Statements........................................................................................... II-200
SAVANNAH:
Report of Independent Public Accountants................................................................................ II-226
Statements of Income for the Years Ended December 31, 1995, 1994 and 1993............................................... II-233
Statements of Retained Earnings for the Years Ended December 31, 1995, 1994 and 1993.................................... II-233
Statements of Cash Flows for the Years Ended December 31, 1995, 1994 and 1993........................................... II-234
Balance Sheets at December 31, 1995 and 1994............................................................................ II-235
Statements of Capitalization at December 31, 1995 and 1994.............................................................. II-237
Notes to Financial Statements........................................................................................... II-238
</TABLE>
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
II-4
<PAGE>
THE SOUTHERN COMPANY
AND SUBSIDIARY COMPANIES
FINANCIAL SECTION
II-5
<PAGE>
MANAGEMENT'S REPORT
The Southern Company and Subsidiary Companies 1995 Annual Report
The management of The Southern Company has prepared -- and is responsible for --
the consolidated financial statements and related information included in this
report. These statements were prepared in accordance with generally accepted
accounting principles appropriate in the circumstances and necessarily include
amounts that are based on the best estimates and judgments of management.
Financial information throughout this annual report is consistent with the
financial statements.
The company maintains a system of internal accounting controls to provide
reasonable assurance that assets are safeguarded and that books and records
reflect only authorized transactions of the company. Limitations exist in any
system of internal controls, however, based on a recognition that the cost of
the system should not exceed its benefits. The company believes its system of
internal accounting controls maintains an appropriate cost/benefit relationship.
The company's system of internal accounting controls is evaluated on an
ongoing basis by the company's internal audit staff. The company's independent
public accountants also consider certain elements of the internal control system
in order to determine their auditing procedures for the purpose of expressing an
opinion on the financial statements.
The audit committee of the board of directors, composed of five directors
who are not employees, provides a broad overview of management's financial
reporting and control functions. Periodically, this committee meets with
management, the internal auditors, and the independent public accountants to
ensure that these groups are fulfilling their obligations and to discuss
auditing, internal controls, and financial reporting matters. The internal
auditors and independent public accountants have access to the members of the
audit committee at any time.
Management believes that its policies and procedures provide reasonable
assurance that the company's operations are conducted according to a high
standard of business ethics.
In management's opinion, the consolidated financial statements present
fairly, in all material respects, the financial position, results of operations,
and cash flows of The Southern Company and its subsidiary companies in
conformity with generally accepted accounting principles.
/s/ A. W. Dahlberg
A. W. Dahlberg
Chairman, President, and Chief Executive Officer
/s/ W. L. Westbrook
W. L. Westbrook
Financial Vice President, Chief Financial Officer, and Treasurer
February 21, 1996
II-6
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors and to the Stockholders of The Southern Company:
We have audited the accompanying consolidated balance sheets and consolidated
statements of capitalization of The Southern Company (a Delaware corporation)
and subsidiary companies as of December 31, 1995 and 1994, and the related
consolidated statements of income, retained earnings, paid-in capital, and cash
flows for each of the three years in the period ended December 31, 1995. These
financial statements are the responsibility of the company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements (pages II-16 through II-38)
referred to above present fairly, in all material respects, the financial
position of The Southern Company and subsidiary companies as of December 31,
1995 and 1994, and the results of their operations and their cash flows for the
periods stated, in conformity with generally accepted accounting principles.
/s/ Arthur Andersen LLP
Atlanta, Georgia
February 21, 1996
II-7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION
The Southern Company and Subsidiary Companies 1995 Annual Report
RESULTS OF OPERATIONS
Earnings and Dividends
This year's financial performance continues to support The Southern Company's
goal to become America's Best Diversified Utility. The core business of selling
electricity in the Southeast remained strong, while the non-core business
expanded both internationally and domestically. The financial results for 1995
demonstrate a very successful year with several records being set. Net income of
$1.1 billion and earnings per share of $1.66 for 1995 both established record
highs. Southern Company common stock reached an all-time high closing price of
24 5/8, surpassing the previous record of 23 3/8 set in 1993. Continued cost
controls and the strong demand for electricity were the dominant forces that
favorably affected earnings in 1995.
Costs related to the work force reduction programs implemented in 1995 and
1994 decreased earnings by 2 cents and 9 cents per share, respectively. These
costs are expected to be recovered through future savings in approximately two
years following each program's implementation. Additional non-operating or
non-recurring items affected earnings in 1995 and 1994. After excluding these
items in both years, 1995 earnings from operations were $1.1 billion -- or $1.71
per share -- an increase of $108 million compared with 1994. The non-operating
items that affected earnings were as follows:
Consolidated Earnings
Net Income Per Share
--------------- ----------------
1995 1994 1995 1994
--------------- ----------------
(in millions)
Earnings as reported $1,103 $ 989 $1.66 $1.52
- - ---------------------------------------------------------------------
Work force reduction
programs 17 61 .02 .09
Sale of facilities (12) (28) (.02) (.04)
Demand-side costs 17 - .03 -
Environmental
cleanup 5 5 .01 .01
Miscellaneous 5 - .01 -
- - ---------------------------------------------------------------------
Total non-operating 32 38 .05 .06
- - ---------------------------------------------------------------------
Earnings from
operations $1,135 $1,027 $1.71 $1.58
=====================================================================
Amount and
percent change $108 10.6% $0.13 8.2%
- - ---------------------------------------------------------------------
In 1995, non-operating items -- both positive and negative -- had an impact
on earnings, which resulted in a net reduction of $32 million. These items were:
(1) Costs associated with work force reduction programs implemented primarily in
1995 decreased earnings. (2) The last in a series of four separate transactions
to sell Plant Scherer Unit 4 to two Florida utilities increased earnings. (3)
Georgia Power's demand-side conservation costs that were not recovered from
customers decreased earnings. (4) Environmental-cleanup costs decreased
earnings.
In 1994, earnings were $989 million or $1.52 per share -- down 5 cents from
the per share amount reported in 1993. Earnings in 1994 were significantly
affected by costs related to work force reduction programs and milder than
normal temperatures.
Dividends paid on common stock during 1995 were $1.22 per share or 30 1/2
cents per quarter. During 1994 and 1993, dividends paid per share were $1.18 and
$1.14, respectively. In January 1996, The Southern Company board of directors
raised the quarterly dividend to 31 1/2 cents per share or an annual rate of
$1.26 per share.
Acquisitions
Southern Electric International (Southern Electric) owns and manages
international and domestic non-core businesses for The Southern Company.
Southern Electric acquired several businesses in late 1994 and in 1995. These
businesses have been included in the consolidated statements of income since the
date of acquisition and not reflected in prior periods. These acquisitions
account for a significant portion of the amount of change in revenues and
certain expenses from year to year. Therefore to facilitate discussing the
results of operations, Southern Electric's 1995 variances are shown separately.
These variances are predominantly acquisition related and require no further
explanation.
II-8
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
The Southern Company and Subsidiary Companies 1995 Annual Report
Revenues
Operating revenues increased in 1995 and decreased in 1994 as a result of the
following factors:
Increase (Decrease)
From Prior Year
------------------------------
1995 1994 1993
------------------------------
Retail -- (in millions)
Change in base rates $ - $ 3 $ 3
Sales growth 177 153 104
Weather 143 (177) 198
Fuel cost recovery and
other 134 (107) 199
-------------------------------------------------------------
Total retail 454 (128) 504
-------------------------------------------------------------
Sales for resale --
Within service area 39 (87) 38
Outside service area (90) (108) (184)
-------------------------------------------------------------
Total sales for resale (51) (195) (146)
Southern Electric 458 131 54
Other operating revenues 22 - 4
-------------------------------------------------------------
Total operating revenues $883 $(192) $ 416
=============================================================
Percent change 10.6% (2.3)% 5.2%
-------------------------------------------------------------
Retail revenues of $7.6 billion in 1995 increased 6.4 percent from last
year, compared with a decrease of 1.8 percent in 1994. Under fuel cost recovery
provisions, fuel revenues generally equal fuel expense -- including the fuel
component of purchased energy -- and do not affect net income.
Sales for resale revenues within the service area were $399 million in 1995,
up 11 percent from the prior year. This increase resulted primarily from the
prolonged hot summer weather, which increased the demand for electricity.
Revenues from sales for resale within the service area were $360 million in
1994, down 19 percent from the prior year. The decrease resulted from certain
municipalities and cooperatives in the service area retaining more of their own
generation at facilities jointly owned with Georgia Power.
Revenues from sales to utilities outside the service area under long-term
contracts consist of capacity and energy components. Capacity revenues reflect
the recovery of fixed costs and a return on investment under the contracts.
Energy is generally sold at variable cost.
1995 1994 1993
---------------------------------
(in millions)
Capacity $237 $276 $350
Energy 151 176 230
------------------------------------------------------
Total $388 $452 $580
======================================================
Capacity revenues decreased in 1995 and 1994 because the amount of capacity
under contract declined, as scheduled, by some 100 megawatts and 400 megawatts,
respectively. Additional declines in capacity are not scheduled until after
1999.
Changes in revenues are influenced heavily by the amount of energy sold each
year. Kilowatt-hour sales for 1995 and the percent change by year were as
follows:
Percent Change
----------------------------
(billions of Amount
kilowatt-hours) 1995 1995 1994 1993
------------- ----------------------------
Residential 39.1 9.2% (2.6)% 9.5%
Commercial 35.9 5.5 3.8 5.9
Industrial 51.7 2.7 3.2 1.9
Other 0.9 2.1 3.8 4.6
-----------
Total retail 127.6 5.4 1.6 5.3
Sales for resale --
Within service area 9.5 16.2 (38.5) 9.5
Outside service area 9.1 (15.1) (13.5) (25.2)
-----------
Total 146.2 4.4 (3.4) 2.1
===================================================================
The rate of increase in 1995 retail energy sales was fostered by the impact
of weather. Residential energy sales surged upward as a result of
hotter-than-normal summer weather in 1995, compared with the extremely mild
summer of 1994. Commercial and industrial sales continue to show moderate gains
in excess of the national average. This reflects the strength of business and
economic conditions in The Southern Company's service area. Energy sales to
retail customers are projected to increase at an average annual rate of 1.9
percent during the period 1996 through 2006.
Energy sales for resale outside the service area are predominantly unit
power sales under long-term contracts to Florida utilities. Economy sales and
amounts sold under short-term contracts are also sold for resale outside the
service area. Sales to customers outside the service area continued to decrease
in 1995 and 1994, primarily as a result of the scheduled decline in megawatts of
capacity under contract.
II-9
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
The Southern Company and Subsidiary Companies 1995 Annual Report
Expenses
Total operating expenses of $7.3 billion for 1995 increased $712 million
compared with the prior year. Core business expenses increased $322 million, and
Southern Electric comprised the remainder. The costs to produce and deliver
electricity for the core business in 1995 increased by $120 million to meet
higher energy demands. Depreciation expenses and property taxes increased by $78
million as a result of additional utility plant being placed into service. The
amortization of deferred expenses related to Plant Vogtle increased by $49
million in 1995 when compared with the prior year. For additional information
concerning Plant Vogtle, see Note 1 to the financial statements under "Plant
Vogtle Phase-In Plans."
In 1994, operating expenses of $6.6 billion declined 2.1 percent compared
with 1993. The decrease was attributable to less energy being sold. Total
production costs were down $297 million. However, costs related to the 1994 work
force reduction programs increased operating expenses by $100 million. Also, a
$39 million increase in the amortization of deferred Plant Vogtle expenses
compared with the amount in 1993 contributed to offset the decrease in operating
expenses.
Fuel costs constitute the single largest expense for The Southern Company.
The mix of fuel sources for generation of electricity is determined primarily by
system load, the unit cost of fuel consumed, and the availability of hydro and
nuclear generating units. The amount and sources of generation and the average
cost of fuel per net kilowatt-hour generated -- within the core business service
area -- were as follows:
1995 1994 1993
---------------------------
Total generation
(billions of kilowatt-hours) 147 142 144
Sources of generation
(percent) --
Coal 77 75 78
Nuclear 17 19 17
Hydro 4 5 4
Oil and gas 2 1 1
Average cost of fuel per net
kilowatt-hour generated
(cents) --
Coal 1.73 1.80 1.90
Nuclear 0.56 0.56 0.54
Oil and gas 3.37 3.99 4.34
Total 1.53 1.56 1.67
- - --------------------------------------------------------------
Fuel and purchased power costs of $2.6 billion in 1995 increased $282 million
compared with 1994. Core business increased $73 million and Southern Electric
increased $209 million. The operating companies' customer demand for electricity
rose by 4.7 billion kilowatt-hours more than in 1994. The additional cost to
meet the demand was offset slightly by a lower average cost of fuel per net
kilowatt-hour generated. Fuel and purchased power expenses of $2.3 billion in
1994 decreased 10 percent compared with the prior year because of lower energy
demands and a lower average cost of fuel per net kilowatt-hour generated.
For 1995, income taxes increased $84 million compared with the prior year.
Core business income taxes increased $65 million, and Southern Electric
accounted for the remainder. The increase was attributable to additional taxable
income from operations. For 1994, income taxes rose $8 million or 1.3 percent
above the amount reported for 1993. The increase resulted primarily from the
sale of interests in generating plant facilities.
Total gross interest charges and preferred stock dividends increased $39
million from amounts reported in the previous year. These costs for core
business continued to decline by $12 million, but Southern Electric interest
charges increased by $51 million. The decline is attributable to lower interest
rates and continued refinancing activities in 1995. In 1994, these costs were
$765 million -- down $66 million or 8.0 percent. As a result of favorable market
conditions, $1.1 billion in 1995, $1.0 billion in 1994, and $3.0 billion in 1993
of senior securities were issued for the primary purpose of retiring higher-cost
securities.
Effects of Inflation
The Southern Company is subject to rate regulation and income tax laws that are
based on the recovery of historical costs. Therefore, inflation creates an
economic loss because the company is recovering its costs of investments in
dollars that have less purchasing power. While the inflation rate has been
relatively low in recent years, it continues to have an adverse effect on The
Southern Company because of the large investment in long-lived utility plant.
Conventional accounting for historical cost does not recognize this economic
loss nor the partially offsetting gain that arises through financing facilities
with fixed-money obligations such as long-term debt and preferred stock. Any
recognition of inflation by regulatory authorities is reflected in the rate of
return allowed.
II-10
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
The Southern Company and Subsidiary Companies 1995 Annual Report
Future Earnings Potential
The results of operations for the past three years are not necessarily
indicative of future earnings potential. The level of future earnings depends on
numerous factors ranging from energy sales growth to a less regulated more
competitive environment, with non-core business becoming more significant.
Work force reduction programs were implemented in 1995 and 1994 that reduced
earnings by $17 million and $61 million, respectively. These actions will assist
in efforts to control growth in future operating expenses.
Future earnings in the near term will depend upon growth in energy sales,
which are subject to a number of factors. Traditionally, these factors have
included weather, competition, changes in contracts with neighboring utilities,
energy conservation practiced by customers, the elasticity of demand, and the
rate of economic growth in the company's service area. However, the Energy
Policy Act of 1992 (Energy Act) is beginning to have a dramatic effect on the
future of the electric utility industry. The Energy Act promotes energy
efficiency, alternative fuel use, and increased competition for electric
utilities. The Southern Company is positioning the business to meet the
challenge of this major change in the traditional practice of selling
electricity. The Energy Act allows independent power producers (IPPs) to access
a utility's transmission network in order to sell electricity to other
utilities. This enhances the incentive for IPPs to build cogeneration plants for
a utility's large industrial and commercial customers and sell excess energy
generation to other utilities. Also, electricity sales for resale rates are
being driven down by wholesale transmission access and numerous potential new
energy suppliers, including power marketers and brokers. The Southern Company is
aggressively working to maintain and expand its share of wholesale sales in the
Southeastern power markets.
Although the Energy Act does not require transmission access to retail
customers, retail wheeling initiatives are rapidly evolving and becoming very
prominent issues in several states. New federal legislation is being discussed,
and legislation allowing customer choice has already been introduced in Florida
and Georgia. In order to address these initiatives, numerous questions must be
resolved, with the most complex ones relating to transmission pricing and
recovery of stranded investments. As the initiatives become a reality, the
structure of the utility industry could radically change. Therefore, unless The
Southern Company remains a low-cost producer and provides quality service, the
company's retail energy sales growth could be limited, and this could
significantly erode earnings. Conversely, being the low-cost producer could
provide significant opportunities to increase market share and profitability by
seeking new markets that evolve with the changing regulation.
The Energy Act amended the Public Utility Holding Company Act of 1935
(PUHCA). The amendment allows holding companies to form exempt wholesale
generators and foreign utility companies to sell power largely free of
regulation under PUHCA. These entities are able to sell power to affiliates --
under certain restrictions -- and to own and operate power generating facilities
in other domestic and international markets. To take advantage of these
opportunities, Southern Electric -- founded in 1981 -- is focusing on
international and domestic cogeneration, the independent power market, and the
privatization of generating and distribution facilities in the international
market. In late 1995, South Western Electricity (SWEB) was acquired for
approximately $1.8 billion. For additional information on this acquisition, see
Note 14 to the financial statements. This British electric distribution utility
and other investments made by Southern Electric should increase the
opportunities for future earnings growth. At December 31, 1995, Southern
Electric's total assets amounted to $5.0 billion.
Demand-side options -- programs that enable customers to lower or alter
their peak energy requirements -- have been implemented by some of the system
operating companies and are a significant part of integrated resource planning.
See Note 3 to the financial statements under "Georgia Power Demand-Side
Conservation Programs" for information concerning the recovery of certain costs.
Customers can receive cash incentives for participating in these programs as
well as reduce their energy requirements. Besides promoting energy efficiency,
another benefit of these programs could be the ability to defer the need to
construct costly baseload generating facilities further into the future.
Rates to retail customers served by the system operating companies are
regulated by the respective state public service commissions in Alabama,
Florida, Georgia, and Mississippi. Rates for Alabama Power and Mississippi Power
are adjusted periodically within certain limitations based on earned retail rate
of return compared with an allowed return. See Note 3 to the financial
statements for information about other retail and wholesale regulatory matters.
II-11
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
The Southern Company and Subsidiary Companies 1995 Annual Report
The staff of the Securities and Exchange Commission has questioned certain of
the current accounting practices of the electric utility industry -- including
The Southern Company's -- regarding the recognition, measurement, and
classification of decommissioning costs for nuclear generating facilities in the
financial statements. In response to these questions, the Financial Accounting
Standards Board (FASB) has decided to review the accounting for liabilities
related to closure and removal of long-lived assets, including nuclear
decommissioning. If the FASB issues new accounting rules, the estimated costs of
closing and removing The Southern Company's nuclear and other facilities may be
required to be recorded as liabilities in the Consolidated Balance Sheets. Also,
the annual provisions for such costs could increase. Because of the company's
current ability to recover closure and removal costs through rates, these
changes would not have a significant adverse effect on results of operations.
See Note 1 to the financial statements under "Depreciation and Nuclear
Decommissioning" for additional information.
The Southern Company is involved in various matters being litigated. See Note
3 to the financial statements for information regarding material issues that
could possibly affect future earnings.
Compliance costs related to the Clean Air Act Amendments of 1990 (Clean Air
Act) could affect earnings if such costs are not fully recovered. The Clean Air
Act and other important environmental items are discussed later under
"Environmental Matters."
The operating companies are subject to the provisions of FASB Statement No.
71, Accounting for the Effects of Certain Types of Regulation. In the event that
a portion of a company's operations is no longer subject to these provisions,
the company would be required to write off related regulatory assets and
liabilities, and determine if any other assets have been impaired. See Note 1 to
the financial statements under "Regulatory Assets and Liabilities" for
additional information.
New Accounting Standards
The FASB has issued Statement No. 121, Accounting for the Impairment of
Long-Lived Assets and Long-Lived Assets to be Disposed of. This statement
requires that long-lived assets be reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount for an asset may not
be recoverable. This statement also imposes stricter criteria for regulatory
assets by requiring that such assets be probable of future recovery at each
balance sheet date. The Southern Company adopted the new rules January 1, 1996,
with no material effect on the financial statements. However, this conclusion
may change in the future as competitive factors influence wholesale and retail
pricing in the utility industry.
The FASB has issued Statement No. 123, Accounting for Stock-Based
Compensation. This statement establishes a fair value based method of accounting
for employee stock options. This method provides for a compensation cost to be
charged to results of operations at the grant date. However, the statement
allows companies to continue following the accounting prescribed by Accounting
Principles Bulletin Opinion No. 25. Opinion No. 25 generally requires
compensation cost to be recognized only for the excess of the quoted market
price at the grant date over the price that an employee must pay to acquire the
stock. The Southern Company has elected to continue with Opinion No. 25.
FINANCIAL CONDITION
Overview
The Southern Company's financial condition continues to remain strong. Both
earnings per share and market price per share set new record levels in 1995.
Earnings from operations continued to increase in 1995 and exceeded $1.1
billion. Based on this performance, in January 1996, The Southern Company board
of directors increased the common stock dividend for the fifth consecutive year.
In 1995, Southern Electric acquired SWEB for approximately $1.8 billion. For
more information on the purchase of this British electric distribution utility,
see Note 14 to the financial statements.
Another major change in The Southern Company's financial condition was gross
property additions of $1.4 billion to utility plant. The majority of funds
needed for gross property additions since 1992 have been provided from operating
activities, principally from earnings and non-cash charges to income such as
depreciation and deferred income taxes. The Consolidated Statements of Cash
Flows provide additional details.
The Southern Company has a policy that financial derivatives are to be used
only to mitigate business risks and not for speculative purposes. Derivatives
have been used by the company on a very limited basis. At December 31, 1995, the
credit risk for derivatives outstanding was not material. See Note 1 to the
financial statements under "Financial Instruments" for additional information.
II-12
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
The Southern Company and Subsidiary Companies 1995 Annual Report
Capital Structure
The Southern Company achieved a ratio of common equity to total capitalization
- - -- including short-term debt -- of 42.4 percent in 1995, compared with 44.4
percent in 1994, and 43.8 percent in 1993. The company's goal is to maintain
the common equity ratio generally within a range of 40 percent to 45 percent.
During 1995, the subsidiary companies sold $375 million of first mortgage
bonds and, through public authorities, $732 million of pollution control revenue
bonds. The companies continued to reduce financing costs by retiring higher-cost
bonds. Retirements, including maturities, of bonds totaled $1.3 billion during
1995, $973 million during 1994, and $2.5 billion during 1993. Retirements of
preferred stock totaled $1 million a year during 1995 and 1994 and $516 million
during 1993. As a result, the composite interest rate on long-term debt
decreased from 8.2 percent at December 31, 1992, to 7.1 percent at December 31,
1995. During this same period, the composite dividend rate on preferred stock
declined from 7.3 percent to 6.5 percent.
In 1995, The Southern Company raised $174 million from the issuance of new
common stock under the company's various stock plans. An additional $103 million
of new common stock was issued through a public offering in early 1995. At the
close of 1995, the company's common stock had a market value of 24 5/8 per
share, compared with a book value of $13.10 per share. The market-to-book value
ratio was 188 percent at the end of 1995, compared with 160 percent at year-end
1994 and 184 percent at year-end 1993.
Capital Requirements for Construction
The construction program of The Southern Company is budgeted at $1.5 billion for
1996, $1.4 billion for 1997, and $1.3 billion for 1998. The total is $4.2
billion for the three years. Actual construction costs may vary from this
estimate because of changes in such factors as: business conditions;
environmental regulations; nuclear plant regulations; load projections;
the cost and efficiency of construction labor, equipment, and materials; and the
cost of capital. In addition, there can be no assurance that costs related to
capital expenditures for the operating companies will be fully recovered.
The operating companies do not have any baseload generating plants under
construction, and current energy demand forecasts do not require any additional
baseload facilities until well into the future. However, within the service
area, the construction of combustion turbine peaking units of approximately 600
megawatts of capacity is planned to be completed by 1998 to meet increased
peak-hour demands. In addition, significant construction of transmission and
distribution facilities and upgrading of generating plants will be continuing.
Other Capital Requirements
In addition to the funds needed for the construction program, approximately $996
million will be required by the end of 1998 for present sinking fund
requirements and maturities of long-term debt. Also, the subsidiaries will
continue to retire higher-cost debt and preferred stock and replace these
obligations with lower-cost capital if market conditions permit.
Environmental Matters
In November 1990, the Clean Air Act was signed into law. Title IV of the Clean
Air Act -- the acid rain compliance provision of the law -- has significantly
impacted The Southern Company. Specific reductions in sulfur dioxide and
nitrogen oxide emissions from fossil-fired generating plants are required in two
phases. Phase I compliance began in 1995 and initially affected 28 generating
units of The Southern Company. As a result of the company's compliance strategy,
an additional 22 generating units were brought into compliance with Phase I
requirements. Phase II compliance is required in 2000, and all fossil-fired
generating plants will be affected.
In 1995, the Environmental Protection Agency (EPA) began issuing annual
sulfur dioxide emission allowances through the allowance trading program. An
emission allowance is the authority to emit one ton of sulfur dioxide during a
calendar year. The method for issuing allowances is based on the fossil fuel
consumed from 1985 through 1987 for each affected generating unit. Emission
allowances are transferable and can be bought, sold, or banked and used in the
future.
The sulfur dioxide emission allowance program is expected to minimize the
cost of compliance. The Southern Company's sulfur dioxide compliance strategy is
designed to use allowances as a compliance option.
II-13
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
The Southern Company and Subsidiary Companies 1995 Annual Report
The Southern Company achieved Phase I sulfur dioxide compliance at the
affected plants by switching to low-sulfur coal, which required some equipment
upgrades. This compliance strategy resulted in unused emission allowances being
banked for later use. Compliance with nitrogen oxide emission limits was
achieved by the installation of new control equipment at 22 of the original 28
affected generating units. Construction expenditures for Phase I compliance
totaled approximately $320 million through 1995.
For Phase II sulfur dioxide compliance, The Southern Company could use
emission allowances banked during Phase I, increase fuel switching, install flue
gas desulfurization equipment at selected plants, and/or purchase more
allowances, depending on the price and availability of allowances. Also, in
Phase II, equipment to control nitrogen oxide emissions will be installed on
additional system fossil-fired units as required to meet Phase II limits.
Therefore, during the period 1996 to 2000, current compliance strategy could
require total estimated construction expenditures of approximately $150 million.
However, the full impact of Phase II compliance cannot now be determined with
certainty, pending the continuing development of a market for emission
allowances, the completion of EPA regulations, and the possibility of new
emission reduction technologies.
An average increase of up to 1 percent in revenue requirements from
customers could be necessary to fully recover the cost of compliance for both
Phase I and Phase II of Title IV of the Clean Air Act. Compliance costs include
construction expenditures, increased costs for switching to low-sulfur coal, and
costs related to emission allowances.
A significant portion of costs related to the acid rain provision of the
Clean Air Act is expected to be recovered through existing ratemaking
provisions. However, there can be no assurance that all Clean Air Act costs will
be recovered.
Metropolitan Atlanta is classified as a non-attainment area with regard to
the ozone ambient air quality standards. Title I of the Clean Air Act requires
the state of Georgia to conduct specific studies and establish new control rules
- - -- affecting sources of nitrogen oxides and volatile organic compounds -- to
achieve attainment by 1999. As the required first step, the state issued rules
for the application of reasonably available control technology to reduce
nitrogen oxide emissions by May 31, 1995. The results of these new rules
required nitrogen oxide controls, above Title IV requirements, on some Georgia
Power plants. The EPA along with 37 states is conducting studies to evaluate the
benefits of regional controls in meeting the ozone standards. Final attainment
rules, based on modeling studies, could require installation of additional
controls for nitrogen oxide emissions to meet the 1999 deadline in Atlanta or as
part of any regional controls if enacted. A decision on new requirements is
expected in 1997. Compliance with any new rules could result in significant
additional costs. The actual impact of new rules will depend on the development
and implementation of such rules.
Title III of the Clean Air Act requires a multi-year EPA study of power
plant emissions of hazardous air pollutants. The EPA is scheduled to submit a
report to Congress on the results of this study during 1996. The report will
include a decision on whether additional regulatory control of these substances
is warranted. Compliance with any new control standards could result in
significant additional costs. The impact of new standards -- if any -- will
depend on the development and implementation of applicable regulations.
The EPA is evaluating the need to revise the ambient air quality standards
for particulate matter and ozone. The impact of any new standard will depend on
the level chosen for the standard and cannot be determined at this time.
In 1996, the EPA may issue revised rules on air quality control regulations
related to stack height requirements of the Clean Air Act. The full impact of
the final rules cannot be determined at this time, pending their development and
implementation.
In 1993, the EPA issued a ruling confirming the non-hazardous status of coal
ash. However, the EPA has until 1998 to classify co-managed utility wastes --
coal ash and other utility wastes -- as either non-hazardous or hazardous. If
the EPA classifies the co-managed wastes as hazardous, then substantial
additional costs for the management of such wastes may be required. The full
impact of any change in the regulatory status will depend on the subsequent
development of co-managed waste requirements.
The Southern Company must comply with other environmental laws and
regulations that cover the handling and disposal of hazardous waste. Under these
various laws and regulations, the subsidiaries could incur substantial costs to
clean up properties. The subsidiaries conduct studies to determine the extent of
II-14
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
The Southern Company and Subsidiary Companies 1995 Annual Report
any required cleanup costs and have recognized in their respective financial
statements costs to clean up known sites. These costs for The Southern Company
amounted to $8 million, $8 million, and $41 million in 1995, 1994, and 1993,
respectively. Additional sites may require environmental remediation for which
the subsidiaries may be liable for a portion or all required cleanup costs. See
Note 3 to the financial statements for information regarding Georgia Power's
potentially responsible party status at a site in Bruswick, Georgia.
Several major pieces of environmental legislation are being considered for
reauthorization or amendment by Congress. These include: the Clean Air Act; the
Clean Water Act; the Comprehensive Environmental Response, Compensation, and
Liability Act; the Resource Conservation and Recovery Act; the Toxic Substances
Control Act; and the Endangered Species Act. Changes to these laws could affect
many areas of The Southern Company's operations. The full impact of these
requirements cannot be determined at this time, pending the development and
implementation of applicable regulations.
Compliance with possible additional legislation related to global climate
change, electromagnetic fields, and other environmental and health concerns
could significantly affect The Southern Company. The impact of new legislation
- - -- if any --will depend on the subsequent development and implementation of
applicable regulations. In addition, the potential exists for liability as the
result of lawsuits alleging damages caused by electromagnetic fields.
Sources of Capital
The Southern Company may require additional equity capital in 1996. The amount
and timing of additional equity capital to be raised in 1996 -- as well as in
subsequent years -- will be contingent on The Southern Company's investment
opportunities. Equity capital can be provided from any combination of public
offerings, private placements, or the company's stock plans. Any portion of the
common stock required during 1996 for the company's stock plans that is not
provided from the issuance of new stock will be acquired on the open market in
accordance with the terms of such plans.
The operating companies plan to obtain the funds required for construction
and other purposes from sources similar to those used in the past, which was
primarily from internal sources. However, the type and timing of any financings
- - -- if needed -- will depend on market conditions and regulatory approval.
To meet short-term cash needs and contingencies, The Southern Company had
approximately $772 million of cash and cash equivalents and $2.8 billion of
unused credit arrangements with banks at the beginning of 1996.
To issue additional first mortgage bonds and preferred stock, the operating
companies must comply with certain earnings coverage requirements designated in
their mortgage indentures and corporate charters. The ability to issue
securities in the future will depend on coverages at that time. Currently, each
of the operating companies expects to have adequate coverage ratios for
anticipated requirements through at least 1998.
II-15
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF INCOME
For the Years Ended December 31, 1995, 1994, and 1993
The Southern Company and Subsidiary Companies 1995 Annual Report
<S> <C> <C> <C>
====================================================================================================================
1995 1994 1993
- - --------------------------------------------------------------------------------------------------------------------
(in millions)
Operating Revenues $9,180 $8,297 $8,489
- - --------------------------------------------------------------------------------------------------------------------
Operating Expenses:
Operation --
Fuel 2,126 2,058 2,265
Purchased power 491 277 336
Other 1,626 1,505 1,445
Maintenance 683 660 653
Depreciation and amortization 904 821 793
Amortization of deferred Plant Vogtle costs, net (Note 1) 124 75 36
Taxes other than income taxes 535 475 462
Federal and state income taxes 805 711 734
- - --------------------------------------------------------------------------------------------------------------------
Total operating expenses 7,294 6,582 6,724
- - --------------------------------------------------------------------------------------------------------------------
Operating Income 1,886 1,715 1,765
Other Income:
Allowance for equity funds used during construction 5 11 9
Interest income 38 32 30
Other, net (65) (28) (34)
Income taxes applicable to other income 36 26 57
- - --------------------------------------------------------------------------------------------------------------------
Income Before Interest Charges 1,900 1,756 1,827
- - --------------------------------------------------------------------------------------------------------------------
Interest Charges and Other:
Interest on long-term debt 557 568 595
Allowance for debt funds used during construction (20) (18) (13)
Interest on notes payable 63 33 30
Amortization of debt discount, premium, and expense, net 44 30 26
Other interest charges 52 47 87
Minority interest in subsidiaries 13 20 7
Preferred dividends of subsidiary companies 88 87 93
- - --------------------------------------------------------------------------------------------------------------------
Net interest charges and other, net 797 767 825
- - --------------------------------------------------------------------------------------------------------------------
Consolidated Net Income $1,103 $ 989 $1,002
====================================================================================================================
Common Stock Data:
Average number of shares of common stock outstanding (in millions) 665 650 637
Earnings per share of common stock $1.66 $1.52 $1.57
Cash dividends paid per share of common stock $1.22 $1.18 $1.14
- - --------------------------------------------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
For the Years Ended December 31, 1995, 1994, and 1993
1995 1994 1993
- - --------------------------------------------------------------------------------------------------------------------
(in millions)
Balance at Beginning of Year $3,191 $2,968 $2,721
Consolidated net income 1,103 989 1,002
- - --------------------------------------------------------------------------------------------------------------------
4,294 3,957 3,723
Cash dividends on common stock 811 766 726
Capital and preferred stock transactions, net - - 29
- - --------------------------------------------------------------------------------------------------------------------
Balance at End of Year (Note 9) $3,483 $3,191 $2,968
====================================================================================================================
The accompanying notes are an integral part of these statements.
</TABLE>
II-16
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 1995, 1994, and 1993
The Southern Company and Subsidiary Companies 1995 Annual Report
<S> <C> <C> <C>
==========================================================================================================================
1995 1994 1993
- - --------------------------------------------------------------------------------------------------------------------------
(in millions)
Operating Activities:
Consolidated net income $ 1,103 $ 989 $ 1,002
Adjustments to reconcile consolidated net income
to net cash provided by operating activities --
Depreciation and amortization 1,134 1,050 1,011
Deferred income taxes and investment tax credits 117 (4) 189
Allowance for equity funds used during construction (5) (11) (9)
Amortization of deferred Plant Vogtle costs (Note 1) 124 75 36
Gain on asset sales (33) (52) (36)
Other, net (52) 45 (9)
Changes in certain current assets and liabilities --
Receivables, net (109) 114 (55)
Fossil fuel stock 28 (110) 138
Materials and supplies 11 (18) (2)
Accounts payable (138) 81 43
Other 135 (48) (61)
- - --------------------------------------------------------------------------------------------------------------------------
Net cash provided from operating activities 2,315 2,111 2,247
- - --------------------------------------------------------------------------------------------------------------------------
Investing Activities:
Gross property additions (1,401) (1,536) (1,441)
Southern Electric business acquisitions (1,416) (405) (465)
Sales of property 287 171 262
Other 153 (87) (37)
- - -------------------------------------------------------------------------------------------------------------------------
Net cash used for investing activities (2,377) (1,857) (1,681)
- - --------------------------------------------------------------------------------------------------------------------------
Financing Activities:
Proceeds --
Common stock 277 279 205
Preferred stock - - 426
Preferred securities - 100 -
First mortgage bonds 375 185 2,185
Other long-term debt 1,805 1,188 592
Retirements --
Preferred stock (1) (1) (516)
First mortgage bonds (538) (241) (2,178)
Other long-term debt (902) (1,039) (450)
Increase in notes payable, net 727 37 114
Payment of common stock dividends (811) (766) (726)
Miscellaneous (237) (35) (137)
- - --------------------------------------------------------------------------------------------------------------------------
Net cash provided from (used for) financing activities 695 (293) (485)
- - --------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Cash and Cash Equivalents 633 (39) 81
Cash and Cash Equivalents at Beginning of Year 139 178 97
- - --------------------------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Year $ 772 $ 139 $ 178
==========================================================================================================================
Supplemental Cash Flow Information:
Cash paid during the year for --
Interest (net of amount capitalized) $622 $618 $673
Income taxes $645 $716 $530
- - --------------------------------------------------------------------------------------------------------------------------
Business acquisitions --
Fair value of assets acquired $2,745 $604 $465
Less cash paid for common stock 1,416 405 465
- - --------------------------------------------------------------------------------------------------------------------------
Liabilities assumed $1,329 $199 $ -
==========================================================================================================================
The accompanying notes are an integral part of these statements.
</TABLE>
II-17
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
At December 31, 1995 and 1994
The Southern Company and Subsidiary Companies 1995 Annual Report
<S> <C> <C>
========================================================================================================
Assets 1995 1994
- - --------------------------------------------------------------------------------------------------------
(in millions)
Utility Plant:
Plant in service (Note 1) $31,878 $29,209
Less accumulated provision for depreciation 10,067 9,577
- - --------------------------------------------------------------------------------------------------------
21,811 19,632
Nuclear fuel, at amortized cost 225 238
Construction work in progress (Note 4) 990 1,247
- - --------------------------------------------------------------------------------------------------------
Total 23,026 21,117
- - --------------------------------------------------------------------------------------------------------
Other Property and Investments:
Argentine operating concession, being amortized 431 446
Goodwill (Note 14) 344 12
Nuclear decommissioning trusts 201 125
Miscellaneous 317 224
- - --------------------------------------------------------------------------------------------------------
Total 1,293 807
- - --------------------------------------------------------------------------------------------------------
Current Assets:
Cash and cash equivalents 772 139
Special deposits 156 36
Receivables, less accumulated provisions for uncollectible accounts
of $37 million in 1995 and $9 million in 1994 1,363 1,022
Fossil fuel stock, at average cost 327 354
Materials and supplies, at average cost 552 553
Prepayments 266 194
Vacation pay deferred 74 70
- - --------------------------------------------------------------------------------------------------------
Total 3,510 2,368
- - --------------------------------------------------------------------------------------------------------
Deferred Charges:
Deferred charges related to income taxes (Note 8) 1,386 1,454
Deferred Plant Vogtle costs (Note 1) 308 432
Debt expense, being amortized 100 48
Premium on reacquired debt, being amortized 295 298
Miscellaneous 636 518
- - --------------------------------------------------------------------------------------------------------
Total 2,725 2,750
- - --------------------------------------------------------------------------------------------------------
Total Assets $30,554 $27,042
========================================================================================================
The accompanying notes are an integral part of these balance sheets.
</TABLE>
II-18
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
At December 31, 1995 and 1994
The Southern Company and Subsidiary Companies 1995 Annual Report
<S> <C> <C>
========================================================================================================
Capitalization and Liabilities 1995 1994
- - --------------------------------------------------------------------------------------------------------
(in millions)
Capitalization (See(Seeoaccompanyingtstatements):
Common stock equity $ 8,772 $ 8,186
Preferred stock of subsidiaries 1,332 1,332
Subsidiary obligated mandatorily redeemable preferred securities 100 100
Long-term debt 8,306 7,593
- - --------------------------------------------------------------------------------------------------------
Total 18,510 17,211
- - --------------------------------------------------------------------------------------------------------
Current Liabilities:
Amount of debt due within one year 509 229
Notes payable 1,670 978
Accounts payable 785 806
Customer deposits 216 102
Taxes accrued-
Federal and state income 93 -
Other 179 153
Interest accrued 199 190
Vacation pay accrued 100 87
Miscellaneous 530 233
- - --------------------------------------------------------------------------------------------------------
Total 4,281 2,778
- - --------------------------------------------------------------------------------------------------------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes (Note 8) 4,611 4,007
Deferred credits related to income taxes (Note 8) 936 987
Accumulated deferred investment tax credits 820 858
Minority interest 231 267
Prepaid capacity revenues 131 138
Department of Energy assessments 86 92
Disallowed Plant Vogtle capacity buyback costs 59 60
Storm damage reserves 31 53
Miscellaneous 858 591
- - --------------------------------------------------------------------------------------------------------
Total 7,763 7,053
- - --------------------------------------------------------------------------------------------------------
Commitments and Contingent Matters (Notes 1, 2, 3, 4, 5, 6, 7, and 14)
Total Capitalization and Liabilities $30,554 $27,042
========================================================================================================
The accompanying notes are an integral part of these balance sheets.
</TABLE>
II-19
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CAPITALIZATION
At December 31, 1995 and 1994
The Southern Company and Subsidiary Companies 1995 Annual Report
<S> <C> <C> <C> <C>
==============================================================================================================
1995 1994 1995 1994
- - --------------------------------------------------------------------------------------------------------------
(in millions) (percent of total)
Common Stock Equity:
Common stock, par value $5 per share --
Authorized -- 1 billion shares
Outstanding -- 1995: 670 million shares,
-- 1994: 657 million shares (Note 9) $3,348 $3,283
Paid-in capital 1,941 1,712
Retained earnings (Note 9) 3,483 3,191
- - --------------------------------------------------------------------------------------------------------------
Total common stock equity 8,772 8,186 47.4% 47.6%
- - --------------------------------------------------------------------------------------------------------------
Cumulative Preferred Stock of Subsidiaries:
$100 par or stated value --
4.20% to 5.96% 199 199
6.32% to 7.88% 205 205
$25 par or stated value --
$1.90 to $2.125 295 295
6.40% to 7.60% 323 323
Auction rates -- at January 1, 1996:
4.43% to 4.53% 70 70
Adjustable rates -- January 1, 1996:
4.67% to 5.27% 240 240
- - --------------------------------------------------------------------------------------------------------------
Total (annual dividend requirement -- $86 million) 1,332 1,332 7.2 7.7
- - --------------------------------------------------------------------------------------------------------------
Subsidiary Obligated Mandatorily
Redeemable Preferred Securities (Note 10):
$25 stated value -- 9% 100 100
- - --------------------------------------------------------------------------------------------------------------
Total (annual distribution requirement -- $9 million) 100 100 0.5 0.6
- - --------------------------------------------------------------------------------------------------------------
</TABLE>
II-20
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CAPITALIZATION (continued)
At December 31, 1995 and 1994
The Southern Company and Subsidiary Companies 1995 Annual Report
<S> <C> <C> <C> <C> <C>
===========================================================================================================================
1995 1994 1995 1994
- - ---------------------------------------------------------------------------------------------------------------------------
(in millions) (percent of total)
Long-Term Debt of Subsidiaries:
First mortgage bonds --
Maturity Interest Rates
1995 5 1/8 % - 130
1996 4 1/2 % 60 60
1996 4 3/4 % 150 150
1997 5 7/8 % 25 25
1998 5% to 5.55% 230 230
1999 6 1/8% to 6 3/8% 365 365
2000 6% to 7% 340 340
2001 through 2005 6 1/8% to 7% 910 910
2006 through 2010 6 7/8% to 9% 226 228
2016 through 2020 8.665% to 9 1/4% 255 65
2021 through 2025 7.3% to 9 3/8% 1,900 1,921
2032 Variable rates - 200
- - ---------------------------------------------------------------------------------------------------------------------------
Total first mortgage bonds 4,461 4,624
Other long-term debt (Note 11) 4,403 3,261
Unamortized debt premium (discount), net (49) (63)
- - ---------------------------------------------------------------------------------------------------------------------------
Total long-term debt (annual interest
requirement -- $626 million) 8,815 7,822
Less amount due within one year (Note 12) 509 229
- - ---------------------------------------------------------------------------------------------------------------------------
Long-term debt excluding amount due within one year 8,306 7,593 44.9 44.1
- - ---------------------------------------------------------------------------------------------------------------------------
Total Capitalization $18,510 $17,211 100.0% 100.0%
===========================================================================================================================
CONSOLIDATED STATEMENTS OF PAID-IN CAPITAL
For the Years Ended December 31, 1995, 1994, and 1993
===========================================================================================================================
1995 1994 1993
- - ---------------------------------------------------------------------------------------------------------------------------
(in millions)
Balance at Beginning of Year $1,712 $1,503 $2,931
Proceeds from sales of common stock over the par value -- 13.0 million,
13.9 million, and 9.7 million shares in 1995, 1994, and 1993, respectively 212 209 179
Two-for-one stock split (Note 9) - - (1,607)
Miscellaneous 17 - -
- - ---------------------------------------------------------------------------------------------------------------------------
Balance at End of Year $1,941 $1,712 $1,503
===========================================================================================================================
The accompanying notes are an integral part of these statements.
</TABLE>
II-21
<PAGE>
NOTES TO FINANCIAL STATEMENTS
The Southern Company and Subsidiary Companies 1995 Annual Report
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General
The Southern Company is the parent company of five operating companies, a system
service company, Southern Communications Services (Southern Communications),
Southern Electric International (Southern Electric), Southern Nuclear Operating
Company (Southern Nuclear), The Southern Development and Investment Group
(Southern Development), and other direct and indirect subsidiaries. The
operating companies provide electric service in four Southeastern states.
Contracts among the companies -- dealing with jointly owned generating
facilities, interconnecting transmission lines, and the exchange of electric
power -- are regulated by the Federal Energy Regulatory Commission (FERC) or the
Securities and Exchange Commission (SEC). The system service company provides,
at cost, specialized services to The Southern Company and subsidiary companies.
Southern Communications provides digital wireless communications services to the
operating companies and also markets these services to the public within the
Southeast. Southern Electric designs, builds, owns, and operates power
production and delivery facilities and provides a broad range of technical
services to industrial companies and utilities in the United States and a number
of international markets. Southern Nuclear provides services to The Southern
Company's nuclear power plants. Southern Development develops new business
opportunities related to energy products and services.
The Southern Company is registered as a holding company under the Public
Utility Holding Company Act of 1935 (PUHCA). Both the company and its
subsidiaries are subject to the regulatory provisions of the PUHCA. The
operating companies also are subject to regulation by the FERC and their
respective state regulatory commissions. The companies follow generally accepted
accounting principles and comply with the accounting policies and practices
prescribed by their respective commissions. The preparation of financial
statements in conformity with generally accepted accounting principles requires
the use of estimates, and the actual results may differ from those estimates.
All material intercompany items have been eliminated in consolidation.
Certain prior years' data presented in the consolidated financial statements
have been reclassified to conform with current year presentation.
Regulatory Assets and Liabilities
The operating companies are subject to the provisions of Financial Accounting
Standards Board (FASB) Statement No. 71, Accounting for the Effects of Certain
Types of Regulation. Regulatory assets represent probable future revenues to the
operating companies associated with certain costs that are expected to be
recovered from customers through the ratemaking process. Regulatory liabilities
represent probable future reductions in revenues associated with amounts that
are to be credited to customers through the ratemaking process. Regulatory
assets and (liabilities) reflected in the Consolidated Balance Sheets at
December 31 relate to:
1995 1994
------------------------
(in millions)
Deferred income taxes $1,386 $1,454
Deferred Plant Vogtle costs 308 432
Premium on reacquired debt 295 298
Demand-side programs 79 97
Department of Energy assessments 73 79
Vacation pay 74 70
Deferred fuel charges 49 51
Postretirement benefits 53 41
Work force reduction costs 56 15
Deferred income tax credits (936) (987)
Storm damage reserves (23) (53)
Other, net 98 108
- - -----------------------------------------------------------------
Total $1,512 $1,605
=================================================================
In the event that a portion of the operating companies' operations is no
longer subject to the provisions of Statement No. 71, the companies would be
required to write off related regulatory assets and liabilities. In addition,
the operating companies would be required to determine any impairment to other
assets, including plant, and write down the assets, if impaired, to their fair
value.
Revenues and Fuel Costs
The operating companies accrue revenues for service rendered but unbilled at the
end of each fiscal period. Fuel costs are expensed as the fuel is used. The
operating companies' electric rates include provisions to adjust billings for
fluctuations in fuel and the energy component of purchased power costs. Revenues
are adjusted for differences between recoverable fuel costs and amounts actually
recovered in current rates.
The company has a diversified base of customers. No single customer or
industry comprises 10 percent or more of revenues. In 1995, uncollectible
accounts continued to average less than 1 percent of revenues.
II-22
<PAGE>
NOTES (continued)
The Southern Company and Subsidiary Companies 1995 Annual Report
Fuel expense includes the amortization of the cost of nuclear fuel and a
charge, based on nuclear generation, for the permanent disposal of spent nuclear
fuel. Total charges for nuclear fuel included in fuel expense amounted to $140
million in 1995, $152 million in 1994, and $137 million in 1993. Alabama Power
and Georgia Power have contracts with the U.S. Department of Energy (DOE) that
provide for the permanent disposal of spent nuclear fuel. Although disposal was
scheduled to begin in 1998, the actual year this service will begin is
uncertain. Sufficient storage capacity currently is available to permit
operation into 2003 at Plant Hatch, into 2009 at Plant Vogtle, and into 2012 and
2014 at Plant Farley units 1 and 2, respectively.
Also, the Energy Policy Act of 1992 required the establishment in 1993 of a
Uranium Enrichment Decontamination and Decommissioning Fund, which is to be
funded in part by a special assessment on utilities with nuclear plants. This
assessment will be paid over a 15-year period, which began in 1993. This fund
will be used by the DOE for the decontamination and decommissioning of its
nuclear fuel enrichment facilities. The law provides that utilities will recover
these payments in the same manner as any other fuel expense. Alabama Power and
Georgia Power -- based on its ownership interests -- estimate their respective
remaining liability at December 31, 1995, under this law to be approximately $40
million and $31 million, respectively. These obligations are recorded in the
Consolidated Balance Sheets.
Depreciation and Nuclear Decommissioning
Depreciation of the original cost of depreciable utility plant in service is
provided primarily by using composite straight-line rates, which approximated
3.3 percent in 1995, 3.2 percent in 1994, and 3.3 percent in 1993. When property
subject to depreciation is retired or otherwise disposed of in the normal course
of business, its cost -- together with the cost of removal, less salvage -- is
charged to the accumulated provision for depreciation. Minor items of property
included in the original cost of the plant are retired when the related property
unit is retired. Depreciation expense includes an amount for the expected costs
of decommissioning nuclear facilities and removal of other facilities.
In 1988, the Nuclear Regulatory Commission (NRC) adopted regulations
requiring all licensees operating commercial power reactors to establish a plan
for providing, with reasonable assurance, funds for decommissioning. Alabama
Power and Georgia Power have external trust funds to comply with the NRC's
regulations. Amounts previously recorded in internal reserves are being
transferred into the external trust funds over set periods of time as approved
by the respective state public service commissions. The NRC's minimum external
funding requirements are based on a generic estimate of the cost to decommission
the radioactive portions of a nuclear unit based on the size and type of
reactor. Alabama Power and Georgia Power have filed plans with the NRC to ensure
that -- over time -- the deposits and earnings of the external trust funds will
provide the minimum funding amounts prescribed by the NRC.
Site study cost is the estimate to decommission a specific facility as of
the site study year, and ultimate cost is the estimate to decommission a
specific facility as of retirement date. The estimated costs of decommissioning
- - -- both site study costs and ultimate costs -- at December 31, 1995, for Alabama
Power's Plant Farley and Georgia Power's ownership interests in plants Hatch and
Vogtle were as follows:
Plant Plant Plant
Farley Hatch Vogtle
-------------------------------
Site study basis (year) 1993 1994 1994
Decommissioning periods:
Beginning year 2017 2014 2027
Completion year 2029 2027 2038
- - --------------------------------------------------------------------
(in millions)
Site study costs:
Radiated structures $489 $294 $233
Non-radiated structures 89 41 52
- - --------------------------------------------------------------------
Total $578 $335 $285
====================================================================
(in millions)
Ultimate costs:
Radiated structures $1,504 $781 $1,018
Non-radiated structures 274 111 230
- - --------------------------------------------------------------------
Total $1,778 $892 $1,248
====================================================================
II-23
<PAGE>
NOTES (continued)
The Southern Company and Subsidiary Companies 1995 Annual Report
Plant Plant Plant
Farley Hatch Vogtle
----------------------------
(in millions)
Amount expensed in 1995 $18 $11 $9
Accumulated provisions:
Balance in external trust
funds $108 $56 $36
Balance in internal reserves 49 30 13
- - -----------------------------------------------------------------
Total $157 $86 $49
=================================================================
Significant assumptions:
Inflation rate 4.5% 4.4% 4.4%
Trust earning rate 7.0 6.0 6.0
- - -----------------------------------------------------------------
Annual provisions for nuclear decommissioning are based on an annuity --
sinking fund -- method as approved by the respective state public service
commissions. All of Alabama Power's decommissioning costs are approved for
ratemaking. For Georgia Power, only the costs to decommission the radioactive
portion of the plants are included in cost of service. Alabama Power and Georgia
Power expect their respective state public service commission to periodically
review and adjust, if necessary, the amounts collected in rates for the
anticipated cost of decommissioning.
The decommissioning cost estimates are based on prompt dismantlement and
removal of the plant from service. The actual decommissioning costs may vary
from the above estimates because of changes in the assumed date of
decommissioning, changes in NRC requirements, or changes in the assumptions used
in making estimates.
Income Taxes
The Southern Company uses the liability method of accounting for deferred income
taxes and provides deferred income taxes for all significant income tax
temporary differences. Investment tax credits utilized are deferred and
amortized to income over the average lives of the related property.
Plant Vogtle Phase-In Plans
In 1987 and 1989, the Georgia Public Service Commission (GPSC) ordered that the
allowed costs of Plant Vogtle, a two-unit nuclear facility of which Georgia
Power owns 45.7 percent, be phased into rates under plans that meet the
requirements of FASB Statement No. 92, Accounting for Phase-In Plans. Under
these plans, Georgia Power deferred financing costs and depreciation expense
until the allowed investment was fully reflected in rates as of October 1991. In
1991, the GPSC modified the Plant Vogtle phase-in plan to begin earlier
amortization of the costs deferred under the plan. Also, the GPSC levelized
capacity buyback expense from co-owners of Plant Vogtle. Previously, pursuant to
two separate interim accounting orders by the GPSC, Georgia Power deferred
substantially all operating expenses and financing costs related to Plant
Vogtle. Each GPSC order called for recovery of deferred costs within 10 years.
Under phase-in plans and accounting orders from the GPSC, Georgia Power deferred
and began amortizing the costs -- recovered through rates -- related to Plant
Vogtle as follows:
1995 1994 1993
------------------------------
(in millions)
Deferred capacity buybacks $ - $ 10 $ 38
Amortization of
deferred costs (124) (85) (74)
- - -----------------------------------------------------------------
Net amortization (124) (75) (36)
Effect of adoption of FASB
Statement No. 109 - - 160
Deferred costs
at beginning of year 432 507 383
- - -----------------------------------------------------------------
Deferred costs
at end of year $308 $432 $507
=================================================================
In 1991, the GPSC ordered that the Plant Vogtle capacity buyback expense be
levelized over a six-year period. The amounts deferred and not expensed in the
year paid totaled $38 million in 1993. In 1995 and 1994, the amount deferred was
exceeded by the amortization of amounts previously deferred by $50 million and
$1 million, respectively. The projected net amortization of the deferred expense
is $62 million in 1996 and $57 million in 1997.
II-24
<PAGE>
NOTES (continued)
The Southern Company and Subsidiary Companies 1995 Annual Report
Allowance for Funds Used During Construction (AFUDC)
AFUDC represents the estimated debt and equity costs of capital funds that are
necessary to finance the construction of new facilities. While cash is not
realized currently from such allowance, it increases the revenue requirement
over the service life of the plant through a higher rate base and higher
depreciation expense. The composite rates used by the operating companies to
calculate AFUDC during the years 1993 through 1995 ranged from a
before-income-tax rate of 3.6 percent to 9.8 percent. AFUDC, net of income tax,
as a percent of consolidated net income was 1.6 percent in 1995, 2.3 percent in
1994, and 1.7 percent in 1993.
Utility Plant
Utility plant is stated at original cost less regulatory disallowances. Original
cost includes: materials; labor; minor items of property; appropriate
administrative and general costs; payroll-related costs such as taxes, pensions,
and other benefits; and the estimated cost of funds used during construction.
The cost of maintenance, repairs, and replacement of minor items of property is
charged to maintenance expense. The cost of replacements of property (exclusive
of minor items of property) is charged to utility plant.
Cash and Cash Equivalents
For purposes of the Consolidated Statements of Cash Flows, temporary cash
investments are considered cash equivalents. Temporary cash investments are
securities with original maturities of 90 days or less.
Financial Instruments
Derivative financial instruments are used by The Southern Company to manage its
interest rate and foreign currency exposures. Gains and losses arising from
effective hedges of existing assets, liabilities, or firm commitments are
deferred and recognized when the offsetting gains and losses are recognized on
the related hedged items. Losses realized on termination of interest rate swap
contracts are deferred and amortized over the terms of the related new debt
agreements. At December 31, 1995, the credit risk for derivatives outstanding
was not material.
The Southern Company hedges its exposure to fluctuations in interest rates
by entering into swap agreements that allow the company to effectively convert
its outstanding variable-rate debt into fixed rates. During 1995, the company
terminated the swap contracts in place at December 31, 1994, incurring a loss on
termination of approximately $32 million, which is being amortized over the life
of the related new fixed-rate debt agreements. At December 31, 1995, six
interest rate swap agreements were in place.
The Southern Company hedges its net investment in South Western Electricity
(SWEB) through forward contracts involving Pounds Sterling. The company
regularly monitors its foreign currency exposure, and ensures that hedge
contract amounts do not exceed the amount of the underlying exposure. At
December 31, 1995, the status of outstanding derivative contracts was as
follows:
Year Of
Maturity or Notional Unrealized
Type Termination Amount Gain (Loss)
- - --------------------- -------------- ---------------------------
(in millions)
Interest rate
swaps 1999-2006 $308 $(9)
Foreign currency
forwards 1996 389 -
- - -----------------------------------------------------------------------
In accordance with FASB Statement No. 107, Disclosure About Fair Value of
Financial Instruments, The Southern Company's financial instruments that the
carrying amount did not approximate fair value at December 31 were as follows:
Carrying Fair
Amount Value
--------------------------
(in millions)
Long-term debt:
At December 31, 1995 $8,668 $8,935
At December 31, 1994 7,674 7,373
Preferred securities:
At December 31, 1995 100 114
- - -----------------------------------------------------------------
The fair value for long-term debt and preferred securities were based on
either closing market price or closing price of comparable instruments.
II-25
<PAGE>
NOTES (continued)
The Southern Company and Subsidiary Companies 1995 Annual Report
Materials and Supplies
Generally, materials and supplies include the cost of transmission,
distribution, and generating plant materials. Materials are charged to inventory
when purchased and then expensed or capitalized to plant, as appropriate, when
installed.
2. RETIREMENT BENEFITS
Pension Plan
The system companies have defined benefit, trusteed, pension plans that cover
substantially all regular employees. Benefits are based on one of the following
formulas: years of service and final average pay or years of service and a
flat-dollar benefit. Primarily, the companies use the "entry age normal method
with a frozen initial liability" actuarial method for funding purposes, subject
to limitations under federal income tax regulations. Amounts funded to the
pension trusts are primarily invested in equity and fixed-income securities.
FASB Statement No. 87, Employers' Accounting for Pensions, requires use of the
"projected unit credit" actuarial method for financial reporting purposes.
Postretirement Benefits
In the United States, The Southern 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 or to the extent required
by the operating companies' respective regulatory commissions.
Amounts funded are primarily invested in debt and equity securities.
FASB Statement No. 106, Employers' Accounting for Postretirement Benefits
Other Than Pensions, requires that medical care and life insurance benefits for
retired employees be accounted for on an accrual basis using a specified
actuarial method, "benefit/years-of-service." In October 1993, the GPSC ordered
Georgia Power to phase in the adoption of Statement No. 106 to cost of service
over a five-year period, whereby one-fifth of the additional costs was expensed
in 1993 and the remaining costs were deferred. An additional one-fifth of the
costs is being expensed each succeeding year until the costs are fully reflected
in cost of service in 1997. The costs deferred during the five-year period will
be amortized to expense over a 15-year period beginning in 1998. For the other
operating companies, the cost of postretirement benefits is reflected in rates
on a current basis.
Funded Status and Cost of Benefits
The following tables show actuarial results and assumptions for pension and
postretirement insurance benefits as computed under the requirements of FASB
Statement Nos. 87 and 106, respectively. The funded status of the plans at
December 31 was as follows:
Pension
-----------------------
1995 1994
-----------------------
(in millions)
Actuarial present value of
benefit obligation:
Vested benefits $2,643 $1,593
Non-vested benefits 97 68
- - ------------------------------------------------------------------
Accumulated benefit obligation 2,740 1,661
Additional amounts related to
projected salary increases 705 638
- - ------------------------------------------------------------------
Projected benefit obligation 3,445 2,299
Less:
Fair value of plan assets 4,725 3,171
Unrecognized net gain (1,025) (789)
Unrecognized prior service cost 60 64
Unrecognized transition asset (126) (139)
- - ------------------------------------------------------------------
Prepaid asset recognized in the
Consolidated Balance Sheets $ 189 $ 8
==================================================================
Postretirement Benefits
----------------------------
1995 1994
----------------------------
(in millions)
Actuarial present value of
benefit obligation:
Retirees and dependents $394 $375
Employees eligible to retire 63 40
Other employees 392 459
- - ------------------------------------------------------------------
Accumulated benefit obligation 849 874
Less:
Fair value of plan assets 205 140
Unrecognized net loss (gain) 85 3
Unrecognized prior service cost (4) -
Unrecognized transition
obligation 292 500
- - ------------------------------------------------------------------
Accrued liability recognized in the
Consolidated Balance Sheets $271 $231
==================================================================
In 1995, the system companies announced a cost sharing program for
postretirement benefits. The program establishes limits on amounts the companies
II-26
<PAGE>
NOTES (continued)
The Southern Company and Subsidiary Companies 1995 Annual Report
will pay to provide future retiree postretirement benefits. This change reduced
the 1995 accumulated postretirement benefit obligation by approximately $186
million.
The weighted average rates assumed in the actuarial calculations were:
1995 1994 1993
--------------------------------
Discount 7.3% 8.0% 7.5%
Annual salary increase 4.8 5.5 5.0
Long-term return on
plan assets 8.5 8.5 8.5
- - ---------------------------------------------------------------
An additional assumption used in measuring the accumulated postretirement
benefit obligation was a weighted average medical care cost trend rate of 9.8
percent for 1995, decreasing gradually to 5.3 percent through the year 2005 and
remaining at that level thereafter. An annual increase in the assumed medical
care cost trend rate of 1 percent would increase the accumulated benefit
obligation at December 31, 1995, by $73 million and the aggregate of the service
and interest cost components of the net retiree cost by $16 million.
Components of the plans' net costs are shown below:
Pension
-----------------------------
1995 1994 1993
-----------------------------
(in millions)
Benefits earned during the year $ 79 $ 77 $ 76
Interest cost on projected
benefit obligation 193 160 156
Actual (return) loss on plan assets (730) 75 (432)
Net amortization and deferral 412 (351) 186
- - --------------------------------------------------------------------
Net pension cost (income) $ (46) $(39) $(14)
====================================================================
Of the above net pension income, $30 million in 1995, $29 million in 1994,
and $9 million in 1993 were recorded in operating expenses, and the remainder
was recorded in construction and other accounts.
Postretirement Benefits
---------------------------
1995 1994 1993
---------------------------
(in millions)
Benefits earned during the year $ 28 $ 31 $ 27
Interest cost on accumulated
benefit obligation 67 64 56
Amortization of transition
obligation 27 27 28
Actual (return) loss on plan
assets
assets (23) 2 (12)
Net amortization and deferral 12 (10) 5
- - ------------------------------------------------------------------
Net postretirement costs $111 $114 $104
==================================================================
Of the above net postretirement costs, $78 million in 1995, $77 million in
1994, and $64 million in 1993 were charged to operating expenses. In addition,
$11 million in 1995, $18 million in 1994, and $21 million in 1993 were deferred,
and the remainder was charged to construction and other accounts.
Work Force Reduction Programs
The system companies have incurred additional costs for work force reduction
programs. The costs related to these programs were $42 million, $112 million,
and $35 million for the years 1995, 1994, and 1993, respectively. In addition,
certain costs of these programs were deferred and are being amortized in
accordance with regulatory treatment. The unamortized balance of these costs was
$56 million at December 31, 1995.
3. LITIGATION AND REGULATORY MATTERS
Stockholder Suit
In April 1991, two Southern Company stockholders filed a derivative action suit
in the U.S. District Court for the Southern District of Georgia against certain
current and former directors and officers of The Southern Company. The suit
alleges violations of the Federal Racketeer Influenced and Corrupt Organizations
Act (RICO) by officers and breaches of fiduciary duty and gross negligence by
all defendants resulting from alleged fraudulent accounting for spare parts,
illegal political campaign contributions, violations of federal securities laws
involving misrepresentations and omissions in SEC filings, and concealment of
the foregoing acts. The complaint seeks damages -- including treble damages
pursuant to RICO -- in an unspecified amount, which if awarded, would be payable
to The Southern Company. The plaintiffs' amended complaint was dismissed by the
court in March 1992. The court ruled the plaintiffs had failed to present
II-27
<PAGE>
NOTES (continued)
The Southern Company and Subsidiary Companies 1995 Annual Report
adequately their allegation that The Southern Company board of directors'
refusal of an earlier demand by the plaintiffs was wrongful. In April 1994, the
U.S. Court of Appeals for the 11th Circuit reversed the dismissal and remanded
the case to the trial court, finding that allegations by the plaintiffs created
a reasonable doubt that the board validly exercised its business judgment in
refusing the earlier demand. In June 1995, for the second time, the trial court
dismissed the suit. The plaintiffs once again have filed an appeal. This action
is still pending.
Georgia Power Potentially Responsible Party Status
In January 1995, Georgia Power and four other unrelated entities were notified
by the Environmental Protection Agency (EPA) that they have been designated as
potentially responsible parties under the Comprehensive Environmental Response,
Compensation, and Liability Act with respect to a site in Brunswick, Georgia. As
of December 31, 1995, Georgia Power had recorded approximately $4 million in
expenses associated with the site. While Georgia Power believes that the total
amount of costs required for the cleanup of this site may be substantial, it is
unable at this time to estimate either such total or the portion for which
Georgia Power may be ultimately responsible. However, based on the nature and
extent of Georgia Power's activities relating to the site, management believes
that the company's portion of these costs should not be material.
Georgia Power Investment in Rocky Mountain
In its 1985 financing order, the GPSC concluded that completion of the Rocky
Mountain pumped storage hydroelectric plant in 1991 as then planned was not
economically justifiable and reasonable and withheld authorization for Georgia
Power to spend funds from approved securities issuances on that plant. In 1988,
Georgia Power and Oglethorpe Power Corporation (OPC) entered into a joint
ownership agreement for OPC to assume responsibility for the construction and
operation of the plant. However, full recovery of Georgia Power's costs depends
on the GPSC's treatment of the plant's costs and the disposition of the plant's
capacity output. In the event the GPSC does not allow full recovery of the plant
costs, then the portion not allowed may have to be written off. In 1995, the
plant went into commercial operation. At December 31, 1995, Georgia Power's net
investment in the plant was approximately $190 million.
The final outcome of this matter cannot now be determined. Accordingly, no
provision for any write-down of the investment in the plant has been made.
FERC Reviews Equity Returns
In May 1991, the FERC ordered that hearings be conducted concerning the
reasonableness of the operating companies' wholesale rate schedules and
contracts that have a return on common equity of 13.75 percent or greater. The
contracts that could be affected by the hearings include substantially all of
the transmission, unit power, long-term power, and other similar contracts. Any
change in the rate of return on common equity that may require refunds as a
result of this proceeding would be substantially for the period beginning in
July 1991 and ending in October 1992.
In August 1992, a FERC administrative law judge issued an opinion that
changes in rate schedules and contracts were not necessary and that the FERC
staff failed to show how any changes were in the public interest. The FERC staff
has filed exceptions to the administrative law judge's opinion, and the matter
remains pending before the FERC.
In August 1994, the FERC instituted another proceeding based on
substantially the same issues as in the 1991 proceeding. The second period under
review for possible refunds was substantially from October 1994 through December
1995. In November 1995, a FERC administrative law judge issued an opinion that
the FERC staff failed to meet its burden of proof, and therefore, no change in
the equity return was necessary. The FERC staff has filed exceptions to the
administrative law judge's opinion, and the matter is pending before the FERC.
If the rates of return on common equity recommended by the FERC staff were
applied to all of the schedules and contracts involved in both proceedings, and
refunds were ordered, the amount of refunds could range up to approximately $120
million at December 31, 1995. However, management believes that rates are not
excessive and that refunds are not justified.
Alabama Power Rate Adjustment Procedures
In November 1982, the Alabama Public Service Commission (APSC) adopted rates
that provide for periodic adjustments based upon Alabama Power's earned return
on end-of-period retail common equity. The rates also provide for adjustments to
recognize the placing of new generating facilities in retail service. Both
increases and decreases have been placed into effect since the adoption of these
rates. The rate adjustment procedures allow a return on common equity range of
13.0 percent to 14.5 percent and limit increases or decreases in rates to 4
percent in any calendar year.
II-28
<PAGE>
NOTES (continued)
The Southern Company and Subsidiary Companies 1995 Annual Report
In June 1995, the APSC issued a rate order granting Alabama Power's request
for gradual adjustments to move toward parity among customer classes. This order
also calls for a moratorium on any periodic retail rate increases (but not
decreases) until July 2001.
In December 1995, the APSC issued an order authorizing Alabama Power to
reduce balance sheet items -- such as plant and deferred charges -- at any time
the company's actual base rate revenues exceed the budgeted revenues. In
accordance with this order, Alabama Power reduced the unamortized balance of
premium on reacquired debt by $10 million in 1995.
The ratemaking procedures will remain in effect until the APSC votes to
modify or discontinue them.
Georgia Power Retail Rate Plan
On February 16, 1996, the GPSC approved a rate plan recommended by the GPSC
staff that concludes the GPSC's review of Georgia Power's earnings initiated in
early 1995 and addressed the company's proposed alternative retail rate plan.
Under the three-year plan, effective January 1, 1996, Georgia Power's earnings
will be evaluated against a retail return on common equity range of 10 percent
to 12.5 percent. Earnings in excess of 12.5 percent will be used to accelerate
the amortization of regulatory assets or accelerate the depreciation of electric
plant. At its option, Georgia Power may also accelerate amortization or
depreciation of assets while within the allowed return on common equity range.
The company is required to absorb cost increases of approximately $29 million
annually during the plan's three-year operation, including $14 million annually
of accelerated depreciation of electric plant. During the plan's operation,
Georgia Power will not file for a general base rate increase unless its
projected retail return on equity falls below 10 percent. On July 1, 1998,
Georgia Power is required to file a general rate case. In response, the GPSC
would be expected to either continue the rate plan or adopt a different one.
Georgia Power Demand-Side Conservation Programs
In October 1993, a Superior Court of Fulton County, Georgia, judge ruled that
rate riders previously approved by the GPSC for recovery of Georgia Power's
costs incurred in connection with demand-side conservation programs were
unlawful. The judge held that the GPSC lacked statutory authority to approve
such rate riders except through general rate case proceedings and that those
procedures had not been followed. Georgia Power suspended collection of the
demand-side conservation costs and appealed the court's decision to the Georgia
Court of Appeals. In December 1993, the GPSC approved Georgia Power's request
for an accounting order allowing Georgia Power to defer all current unrecovered
and future costs related to these programs, pending the resolution of the
recovery of such costs.
After the Georgia Court of Appeals upheld the legality of the rate riders,
Georgia Power resumed collection under the riders in December 1994. In August
1995, the GPSC ordered Georgia Power to discontinue the demand-side conservation
programs by the end of 1995. However, Georgia Power's rate riders will continue
in effect until costs deferred are collected. Under the new retail rate plan,
approved February 16, 1996, Georgia Power will expense approximately $29 million
of deferred program costs over a three-year period that will not be recovered
under the rate riders.
4. CONSTRUCTION PROGRAM
The system companies are engaged in continuous construction programs, currently
estimated to total some $1.5 billion in 1996, $1.4 billion in 1997, and $1.3
billion in 1998. These estimates include AFUDC of $22 million in 1996, $22
million in 1997, and $25 million in 1998. The construction programs are subject
to periodic review and revision, and actual construction costs may vary from the
above estimates because of numerous factors. These factors include changes in
business conditions; revised load growth estimates; changes in environmental
regulations; changes in existing nuclear plants to meet new regulatory
requirements; increasing costs of labor, equipment, and materials; and cost of
capital. At December 31, 1995, significant purchase commitments were outstanding
in connection with the construction program. The operating companies do not have
any new baseload generating plants under construction. However, within the
service area, the construction of combustion turbine peaking units of
approximately 600 megawatts is planned to be completed by 1998. In addition,
significant construction will continue related to transmission and distribution
facilities and the upgrading and extension of the useful lives of generating
plants.
II-29
<PAGE>
NOTES (continued)
The Southern Company and Subsidiary Companies 1995 Annual Report
See Management's Discussion and Analysis under "Environmental Matters" for
information on the impact of the Clean Air Act Amendments of 1990 and other
environmental matters.
5. FINANCING, INVESTMENTS, AND COMMITMENTS
General
The Southern Company may require additional equity capital in 1996. The amount
and timing of additional equity capital to be raised in 1996 -- as well as in
subsequent years -- will be contingent on The Southern Company's investment
opportunities. Equity capital can be provided from any combination of public
offerings, private placements, or the company's stock plans.
The operating companies' construction programs are expected to be financed
primarily from internal sources. Short-term debt is often utilized and the
amounts available are discussed below. The companies may issue additional
long-term debt and preferred stock primarily for the purposes of debt maturities
and for redeeming higher-cost securities if market conditions permit.
Southern Electric Investments
Southern Electric has substantial investments in production and delivery
facilities in the United States and various international markets. The most
recent acquisition was SWEB, and for additional information see Note 14.
Southern Electric's total assets were $5.0 billion at December 31, 1995. The
consolidated financial statements reflect investments in majority-owned or
controlled subsidiaries on a consolidated basis and other investments on an
equity basis.
Bank Credit Arrangements
At the beginning of 1996, unused credit arrangements with banks totaled $2.8
billion, of which approximately $1.5 billion expires at various times during
1996 and 1997; $16 million expires in February 1998; $73 million expires in May
1998; $400 million expires in June 1998; $300 million expires in July 1998; $300
million expires in November 1998; and $56 million expires in December 1998.
Also, $136 million expires in the years 1999 through 2002.
Georgia Power's revolving credit agreements of $60 million, all of which
remained unused as of December 31, 1995, expire May 1, 1998. During the term of
these agreements, Georgia Power may convert short-term borrowings into term
loans, payable in 12 equal quarterly installments, with the first installment
due at the end of the first calendar quarter after the applicable termination
date or at an earlier date at Georgia Power's option. In connection with these
credit arrangements, Georgia Power agrees to pay commitment fees based on the
unused portions of the commitments or to maintain compensating balances with the
banks.
Gulf Power's revolving credit agreements of $20 million, of which $13
million remained unused as of December 31, 1995, expire May 31, 1998. These
agreements allow short-term and/or term borrowings with various terms and
conditions regarding repayment. In connection with these credit arrangements,
Gulf Power agrees to pay commitment fees based on the unused portions of the
commitments or to maintain compensating balances with the banks.
The $400 million expiring June 30, 1998, is under revolving credit
arrangements with several banks that provide The Southern Company, Alabama
Power, and Georgia Power up to the total credit amount of $400 million. To
provide liquidity support to commercial paper programs, $100 million, $135
million, and $165 million available credit are currently dedicated to the
exclusive use of The Southern Company, Alabama Power, and Georgia Power,
respectively. During the term of these agreements, short-term borrowings may be
converted into term loans, payable in 12 equal quarterly installments, with the
first installment due at the end of the first calendar quarter after the
applicable termination date or at an earlier date at the companies' option. In
addition, these agreements require payment of commitment fees based on the
unused portions of the commitments or the maintenance of compensating balances
with the banks.
The Southern Company has $300 million of revolving credit agreements
expiring July 1, 1998, and $300 million of revolving credit agreements expiring
November 30, 1998, all of which remained unused at December 31, 1995. These
agreements allow short-term borrowings to be converted into term loans, payable
in 12 equal quarterly installments, with the first installment due at the end of
the first calendar quarter after the applicable termination date or at an
earlier date at The Southern Company's option. In connection with these credit
arrangements, The Southern Company agrees to pay commitment fees based on the
unused portions of the commitments or to maintain compensating balances with the
banks.
II-30
<PAGE>
NOTES (continued)
The Southern Company and Subsidiary Companies 1995 Annual Report
Mississippi Power's revolving credit agreements of $40 million, all of which
remained unused as of December 31, 1995, expire December 1, 1998. These
agreements allow short-term borrowings to be converted into term loans, payable
in 12 equal quarterly installments, with the first installment due at the end of
the first calendar quarter after the applicable termination date or at an
earlier date at Mississippi Power's option. In connection with these credit
arrangements, Mississippi Power agrees to pay commitment fees based on the
unused portions of the commitments or to maintain compensating balances with the
banks.
Savannah Electric's revolving credit arrangements of $20 million, of which
$16 million remained unused as of December 31, 1995, expire December 31, 1998.
These agreements allow short-term borrowings to be converted into terms loans,
payable in 12 equal quarterly installments, with the first installment due at
the end of the first calendar quarter after the applicable termination date or
at an earlier date at Savannah Electric's option. In connection with these
credit arrangements, Savannah Electric agrees to pay commitment fees based on
the unused portions of the commitments.
Southern Electric's revolving credit agreements of $212 million, of which
$151 million remained unused as of December 31, 1995, expire at various times
from 1998 through 2002. These agreements allow for short-term borrowings with
various terms and conditions. These agreements require payment of commitment
fees based on the unused portions of the commitments.
A portion of the $2.8 billion unused credit arrangements with banks --
discussed earlier -- is allocated to provide liquidity support to the companies'
variable rate pollution control bonds. At December 31, 1995, the amount of
credit lines allocated was $692 million.
In connection with all other lines of credit, the companies have the option
of paying fees or maintaining compensating balances, which are substantially all
the cash of the companies except for daily working funds and similar items These
balances are not legally restricted from withdrawal.
In addition, the companies from time to time borrow under uncommitted lines
of credit with banks and in the case of The Southern Company, Alabama Power, and
Georgia Power, through commercial paper programs that have the liquidity support
of committed bank credit arrangements.
Assets Subject to Lien
Each of The Southern Company's subsidiaries is organized as a legal entity,
separate, and apart from The Southern Company and its other subsidiaries. The
subsidiary companies' mortgages, which secure the first mortgage bonds issued by
the companies, constitute a direct first lien on substantially all of the
companies' respective fixed property and franchises. There are no agreements or
other arrangements among the subsidiary companies under which the assets of one
company have been pledged or otherwise made available to satisfy obligations of
The Southern Company or any of its subsidiaries.
Fuel and Purchase Power Commitments
To supply a portion of the fuel requirements of the generating plants, The
Southern Company has entered into various long-term commitments for the
procurement of fossil and nuclear fuel. In most cases, these contracts contain
provisions for price escalations, minimum purchase levels, and other financial
commitments. Also, The Southern Company has entered into various long-term
commitments for the purchase of electricity. Total estimated long-term
obligations at December 31, 1995, were as follows:
Purchased
Year Fuel Power
- - ----------- -----------------------------
(in millions)
1996 $ 1,914 $ 495
1997 1,656 427
1998 1,482 155
1999 1,093 161
2000 728 166
2001 and thereafter 6,078 1,943
- - -------------------------------------------------------------
Total commitments $12,951 $3,347
=============================================================
II-31
<PAGE>
NOTES (continued)
The Southern Company and Subsidiary Companies 1995 Annual Report
Operating Leases
The Southern Company has operating lease agreements with various terms and
expiration dates. These expenses totaled $17 million, $15 million, and $11
million for 1995, 1994, and 1993, respectively. At December 31, 1995, estimated
minimum rental commitments for noncancelable operating leases were as follows:
Year Amounts
- - -------- ----------------
(in millions)
1996 $ 22
1997 20
1998 19
1999 19
2000 20
2001 and thereafter 252
- - ---------------------------------------------------------------
Total minimum payments $352
===============================================================
6. FACILITY SALES AND JOINT OWNERSHIP AGREEMENTS
In 1992, Alabama Power sold an undivided interest in units 1 and 2 of Plant
Miller and related facilities to Alabama Electric Cooperative, Inc.
Since 1975, Georgia Power has sold undivided interests in plants Vogtle,
Hatch, Scherer, and Wansley in varying amounts, together with transmission
facilities, to OPC, the Municipal Electric Authority of Georgia, and the
city of Dalton, Georgia. In addition, Georgia Power has joint ownership
agreements with OPC for the Rocky Mountain project and with Florida Power
Corporation (FPC) for a combustion turbine unit at Intercession City, Florida.
In 1995, Georgia Power completed the sale of Unit 4 of Plant Scherer to
Florida Power & Light Company (FP&L) and Jacksonville Electric Authority (JEA).
FP&L owns approximately 76.4 percent of the unit, with JEA owning the remainder.
Georgia Power operates and maintains the unit.
At December 31, 1995, Alabama Power's and Georgia Power's ownership and
investment (exclusive of nuclear fuel) in jointly owned facilities with the
above entities were as follows:
Jointly Owned Facilities
------------------------------------------------
Percent Amount of Accumulated
Ownership Investment Depreciation
---------------- ------------------------------
Plant Vogtle (in millions)
(nuclear) 45.7% $3,295 $730
Plant Hatch
(nuclear) 50.1 842 394
Plant Miller
(coal)
Units 1 and 2 91.8 712 281
Plant Scherer
(coal)
Units 1 and 2 8.4 112 39
Plant Wansley
(coal) 53.5 297 132
Rocky Mountain
(pumped storage) 25.4 200 10
- - ------------------------------------------------------------------
In 1994, Georgia Power and FPC entered into a joint ownership agreement
regarding the Intercession City combustion turbine unit. The unit is scheduled
to be in commercial operation by the end of 1996, and will be constructed,
operated, and maintained by FPC. Georgia Power will have an approximate interest
of 33 percent in the 150-megawatt unit, with retention of 100 percent of the
capacity from June through September. FPC will have the capacity the remainder
of the year. Georgia Power's investment in the unit at completion is estimated
to be $14 million.
Alabama Power and Georgia Power have contracted to operate and maintain the
jointly owned facilities -- except for the Rocky Mountain project and
Intercession City -- as agents for their respective co-owners. The companies'
proportionate share of their plant operating expenses is included in the
corresponding operating expenses in the Consolidated Statements of Income.
7. LONG-TERM POWER SALES AGREEMENTS
The operating companies have long-term contractual agreements for the sale of
capacity and energy to certain non-affiliated utilities located outside the
system's service area. The agreements for non-firm capacity expired in 1994.
Other agreements --expiring at various dates discussed below -- are firm and
pertain to capacity related to specific generating units. Because the energy is
II-32
<PAGE>
NOTES (continued)
The Southern Company and Subsidiary Companies 1995 Annual Report
generally sold at cost under these agreements, revenues from capacity sales
primarily affect profitability. The capacity revenues have been as follows:
Unit Other
Year Power Long-Term Total
---- ------------------------------------
(in millions)
1995 $237 $ - $237
1994 257 19 276
1993 312 38 350
In 1994, long-term non-firm power of 200 megawatts was sold to FPC under a
contract that expired at year-end. In January 1995, the amount of unit power
sales to FPC increased by 200 megawatts.
Unit power from specific generating plants is currently being sold to FP&L,
FPC, JEA, and the city of Tallahassee, Florida. Under these agreements,
approximately 1,600 megawatts of capacity is scheduled to be sold annually
through 1999. Thereafter, these sales will decline to some 1,500 megawatts and
remain at that approximate level -- unless reduced by FP&L, FPC, and JEA for the
periods after 1999 -- until the expiration of the contracts in 2010.
8. INCOME TAXES
Effective January 1, 1993, The Southern Company adopted FASB Statement No. 109,
Accounting for Income Taxes. The adoption resulted in the recording of
additional deferred income taxes and related regulatory assets and liabilities.
At December 31, 1995, the tax- related regulatory assets and liabilities were
$1.4 billion and $936 million, respectively. These assets are attributable to
tax benefits flowed through to customers in prior years and to taxes applicable
to capitalized AFUDC. These liabilities are attributable to deferred taxes
previously recognized at rates higher than current enacted tax law and to
unamortized investment tax credits.
Details of the federal and state income tax provisions are as follows:
1995 1994 1993
---------------------------
(in millions)
Total provision for income taxes:
Federal --
Currently payable $567 $598 $421
Deferred -- current year 184 67 224
-- reversal of
prior years (111) (75) (51)
Deferred investment tax
credits 1 - (20)
- - -------------------------------------------------------------------
641 590 574
- - -------------------------------------------------------------------
State --
Currently payable 90 86 64
Deferred -- current year 26 15 39
-- reversal of
prior years (12) (11) (3)
- - -------------------------------------------------------------------
104 90 100
- - -------------------------------------------------------------------
International 24 5 3
- - -------------------------------------------------------------------
Total 769 685 677
Less income taxes charged
(credited) to other income (36) (26) (57)
- - -------------------------------------------------------------------
Federal and state income
taxes charged to operations $805 $711 $734
===================================================================
The tax effects of temporary differences between the carrying amounts of
assets and liabilities in the financial statements and their respective tax
bases, which give rise to deferred tax assets and liabilities, are as follows:
1995 1994
-----------------------
(in millions)
Deferred tax liabilities:
Accelerated depreciation $2,795 $2,637
Property basis differences 2,175 1,647
Deferred plant costs 100 141
Other 247 271
- - -------------------------------------------------------------------
Total 5,317 4,696
- - -------------------------------------------------------------------
Deferred tax assets:
Federal effect of state deferred taxes 107 104
Other property basis differences 273 278
Deferred costs 118 79
Pension and other benefits 66 63
Other 192 225
- - -------------------------------------------------------------------
Total 756 749
- - -------------------------------------------------------------------
Net deferred tax liabilities 4,561 3,947
Portion included in current assets, net 50 60
- - -------------------------------------------------------------------
Accumulated deferred income taxes
in the Consolidated Balance Sheet $4,611 $4,007
===================================================================
II-33
<PAGE>
NOTES (continued)
The Southern Company and Subsidiary Companies 1995 Annual Report
Deferred investment tax credits are amortized over the life of the related
property with such amortization normally applied as a credit to reduce
depreciation in the Consolidated Statements of Income. Credits amortized in this
manner amounted to $38 million in 1995, $42 million in 1994, and $36 million in
1993. At December 31, 1995, all investment tax credits available to reduce
federal income taxes payable had been utilized.
A reconciliation of the federal statutory income tax rate to the effective
income tax rate is as follows:
1995 1994 1993
------------------------------
Federal statutory rate 35.0% 35.0% 35.0%
State income tax,
net of federal deduction 3.4 3.3 3.7
Non-deductible book
depreciation 1.6 1.8 1.9
Difference in prior years'
deferred and current tax rate (1.1) (1.5) (1.3)
Other 0.3 0.3 (1.1)
- - ----------------------------------------------------------------------
Effective income tax rate 39.2% 38.9% 38.2%
======================================================================
The Southern Company files a consolidated federal income tax return. Under a
joint consolidated income tax agreement, each subsidiary's current and deferred
tax expense is computed on a stand-alone basis. Tax benefits from losses of the
parent company are allocated to each subsidiary based on the ratio of taxable
income to total consolidated taxable income.
9. COMMON STOCK
Stock Distribution
In January 1994, The Southern Company board of directors authorized a
two-for-one common stock split in the form of a stock distribution for each
share held as of February 7, 1994. For all reported common stock data, the
number of common shares outstanding and per share amounts for earnings,
dividends, and market price reflect the stock distribution.
Shares Reserved
At December 31, 1995, a total of 69 million shares was reserved for issuance
pursuant to the Dividend Reinvestment and Stock Purchase Plan, the Employee
Savings Plan, the Outside Directors Stock Plan, and the Executive Stock Option
Plan.
Executive Stock Option Plan
The Southern Company's Executive Stock Option Plan authorizes the granting of
non-qualified stock options to key employees of The Southern Company, including
officers. As of December 31, 1995, some 200 current and former employees
participated in the plan. The maximum number of shares of common stock that may
be issued under the Executive Stock Option Plan may not exceed 6 million. The
price of options granted to date has been at the fair market value of the shares
on the date of grant. Options granted to date become exercisable pro rata over a
maximum period of four years from the date of grant. Options outstanding will
expire no later than 10 years after the date of grant, unless terminated earlier
by the board of directors in accordance with the plan.
Stock option activity in 1994 and 1995 is summarized below:
Shares Average
Subject Option Price
To Option Per Share
-----------------------------------
Balance at December 31, 1993 1,364,810 $16.77
Options granted 446,443 18.88
Options canceled -- --
Options exercised (74,649) 14.81
- - ---------------------------------------------------------------------
Balance at December 31, 1994 1,736,604 17.39
Options granted 1,161,174 21.63
Options canceled (8,088) 21.63
Options exercised (413,391) 14.34
- - ---------------------------------------------------------------------
Balance at December 31, 1995 2,476,299 $19.87
=====================================================================
Shares reserved for future grants:
At December 31, 1993 3,714,444
At December 31, 1994 3,268,001
At December 31, 1995 2,114,915
- - ---------------------------------------------------------------------
Options exercisable:
At December 31, 1994 793,989
At December 31, 1995 831,227
- - ---------------------------------------------------------------------
Common Stock Dividend Restrictions
The income of The Southern Company is derived primarily from equity in earnings
of its subsidiaries. At December 31, 1995, consolidated retained earnings
included $3.1 billion of undistributed retained earnings of the subsidiaries. Of
this amount, $2.0 billion was restricted against the payment by the subsidiary
companies of cash dividends on common stock under terms of bond indentures or
charters.
II-34
<PAGE>
NOTES (continued)
The Southern Company and Subsidiary Companies 1995 Annual Report
10. PREFERRED SECURITIES
In December 1994, Georgia Power Capital, L.P., of which Georgia Power is the
sole general partner, issued $100 million of 9 percent mandatorily redeemable
preferred securities. The sole asset of Georgia Power Capital is $103 million
aggregate principal amount of Georgia Power's 9 percent Junior Subordinated
Deferrable Interest Debentures due December 19, 2024. Georgia Power considers
that the mechanisms and obligations relating to the preferred securities, taken
together, constitute a full and unconditional guarantee by Georgia Power of
Georgia Power Capital's payment obligations with respect to the preferred
securities.
11. OTHER LONG-TERM DEBT
Details of other long-term debt at December 31 are as follows:
1995 1994
--------------------
(in millions)
Obligations incurred in connection
with the sale by public authorities
of tax-exempt pollution control
revenue bonds:
Collateralized --
4.375% to 9.375% due
2000-2025 $1,466 $1,179
Variable rates (3.5% to 6.1%
at 1/1/96) due 2011-2025 639 412
Non-collateralized --
7.25% due 2003 1 1
6.75% to 10.6% due 2015-2020 277 828
5.8% due 2022 10 10
Variable rates (3.25% to 3.75%
at 1/1/96) due 2019-2022 132 85
- - ----------------------------------------------------------------
2,525 2,515
- - ----------------------------------------------------------------
Capitalized lease obligations 147 148
- - ----------------------------------------------------------------
Notes payable:
4.15% to 13% due 1995-1998 107 179
6.31% to 11% due 1999-2008 404 170
Adjustable rates (4% to 7% at
1/1/96) due 1995-1998 129 119
Adjustable rates (7.5% to 9.18%
at 1/1/96) due 1999-2000 165 130
Adjustable rate (7.7 % at
1/1/96) due 2000 926 -
- - ----------------------------------------------------------------
1,731 598
- - ----------------------------------------------------- ----------
Total $4,403 $3,261
================================================================
With respect to the collateralized pollution control revenue bonds, the
operating companies have authenticated and delivered to trustees a like
principal amount of first mortgage bonds as security for obligations under
installment sale or loan agreements. The principal and interest on the first
mortgage bonds will be payable only in the event of default under the
agreements.
Assets acquired under capital leases are recorded as utility plant in
service, and the related obligation is classified as other long-term debt. The
net book value of capitalized leases was $122 million and $126 million at
December 31, 1995 and 1994, respectively. At December 31, 1995, the composite
interest rates for buildings and other were 9.7 percent and 11.3 percent,
respectively. Sinking fund requirements and/or serial maturities through 2000
applicable to other long-term debt are as follows: $264 million in 1996; $99
million in 1997; $42 million in 1998; $23 million in 1999; and $56 million in
2000.
12. LONG-TERM DEBT DUE WITHIN ONE YEAR
A summary of the improvement fund requirements and scheduled maturities and
redemptions of long-term debt due within one year at December 31 is as follows:
1995 1994
-----------------
(in millions)
Bond improvement fund requirements $ 43 $ 48
Less:
Portion to be satisfied by certifying
property additions 18 46
Reacquired bonds - -
- - ------------------------------------------------------------------
Cash sinking fund requirements 25 2
First mortgage bond maturities
and redemptions 220 130
Other long-term debt maturities
(Note 11) 264 97
- - ------------------------------------------------------------------
Total $509 $229
==================================================================
The first mortgage bond improvement (sinking) fund requirements amount to 1
percent of each outstanding series of bonds authenticated under the indentures
prior to January 1 of each year, other than those issued to collateralize
pollution control and other obligations. The requirements may be satisfied by
depositing cash or reacquiring bonds, or by pledging additional property equal
to 166 2/3 percent of such requirements.
II-35
<PAGE>
NOTES (continued)
The Southern Company and Subsidiary Companies 1995 Annual Report
13. NUCLEAR INSURANCE
Under the Price-Anderson Amendments Act of 1988, Alabama Power and Georgia Power
maintain agreements of indemnity with the NRC that, together with private
insurance, cover third-party liability arising from any nuclear incident
occurring at the companies' nuclear power plants. The act provides funds up to
$8.9 billion for public liability claims that could arise from a single nuclear
incident. Each nuclear plant is insured against this liability to a maximum of
$200 million by private insurance, with the remaining coverage provided by a
mandatory program of deferred premiums that could be assessed, after a nuclear
incident, against all owners of nuclear reactors. A company could be assessed up
to $79 million per incident for each licensed reactor it operates but not more
than an aggregate of $10 million per incident to be paid in a calendar year for
each reactor. Such maximum assessment, excluding any applicable state premium
taxes, for Alabama Power and Georgia Power -- based on its ownership and buyback
interests -- is $159 million and $162 million, respectively, per incident but
not more than an aggregate of $20 million per company to be paid for each
incident in any one year.
Alabama Power and Georgia Power are members of Nuclear Mutual Limited (NML),
a mutual insurer established to provide property damage insurance in an amount
up to $500 million for members' nuclear generating facilities. The members are
subject to a retrospective premium assessment in the event that losses exceed
accumulated reserve funds. Alabama Power's and Georgia Power's maximum annual
assessments are limited to $10 million and $12 million, respectively, under
current policies.
Additionally, both companies have policies that currently provide
decontamination, excess property insurance, and premature decommissioning
coverage up to $2.25 billion for losses in excess of the $500 million NML
coverage. This excess insurance is provided by Nuclear Electric Insurance
Limited (NEIL), a mutual insurance company.
NEIL also covers the additional costs that would be incurred in obtaining
replacement power during a prolonged accidental outage at a member's nuclear
plant. Members can be insured against increased costs of replacement power in an
amount up to $3.5 million per week -- starting 21 weeks after the outage -- for
one year and up to $2.8 million per week for the second and third years.
Under each of the NEIL policies, members are subject to assessments if
losses each year exceed the accumulated funds available to the insurer under
that policy. The maximum annual assessments under current policies for Alabama
Power and Georgia Power for excess property damage would be $21 million and $24
million, respectively. The maximum replacement power assessments are $8 million
for Alabama Power and $13 million for Georgia Power.
For all on-site property damage insurance policies for commercial nuclear
power plants, the NRC requires that the proceeds of such policies issued or
renewed on or after April 2, 1991, shall be dedicated first for the sole purpose
of placing the reactor in a safe and stable condition after an accident. Any
remaining proceeds are to be applied next toward the costs of decontamination
and debris removal operations ordered by the NRC, and any further remaining
proceeds are to be paid either to the company or to its bond trustees as may be
appropriate under the policies and applicable trust indentures.
Alabama Power and Georgia Power participate in an insurance program for
nuclear workers that provides coverage for worker tort claims filed for bodily
injury caused at commercial nuclear power plants. In the event that claims for
this insurance exceed the accumulated reserve funds, Alabama Power and Georgia
Power could be subject to a maximum total assessment of approximately $6 million
each.
All retrospective assessments -- whether generated for liability, property,
or replacement power -- may be subject to applicable state premium taxes.
II-36
<PAGE>
NOTES (continued)
The Southern Company and Subsidiary Companies 1995 Annual Report
14. ACQUISITION
In 1995, Southern Electric acquired SWEB for approximately $1.8 billion. This
British utility distributes electricity to some 1.3 million customers.
The acquisition has been accounted for under the purchase method of
accounting. The acquisition cost exceeded the preliminary estimate of the fair
market value of net assets by $333 million. This amount is considered goodwill
and will be amortized on a straight-line basis over 40 years. The preliminary
estimate of net assets may be revised in 1996.
SWEB has been included in the consolidated financial statements since
September 1995. The following unaudited pro forma results of operations for the
years 1995 and 1994 have been prepared assuming the acquisition of SWEB,
effective January 1994, and assuming 100 percent short-term debt financing.
Eventually, the short-term borrowings will be replaced by a combination of
long-term debt and equity. The pro forma results are not necessarily indicative
of the actual results that would have been realized had the acquisition occurred
on the assumed date, nor are they necessarily indicative of future results. Pro
forma operating results are for information purposes only and are as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1995 1994
--------------------------------------------------
As Pro As Pro
Reported Forma Reported Forma
----------- --------- ---------- --------
Operating revenues (in millions) $9,180 $10,013 $8,297 $9,493
Consolidated net income (in millions) $1,103 $1,144 $989 $1,053
Earnings per share $1.66 $1.72 $1.52 $1.62
</TABLE>
15. SEGMENT INFORMATION
The Southern Company's principal business segment -- or its core business -- is
the five electric utility operating companies, which provide electric service in
four Southeastern states. The other reportable business segment is Southern
Electric, which owns and operates power production and delivery facilities in
the United States and various international markets. Financial data for business
segments and geographic areas are as follows:
Business Segments
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Gross Depreciation
Operating Operating Total Property and
Year Revenues Income Assets Additions Amortization
- - --------------- ---------------------------------------------------------------------------
(in millions)
1995
- - ----
Core business $8,537 $1,781 $25,532 $1,265 $1,075
Southern Electric 643 105 5,022 136 59
- - ---------------------------------------------------------------------------------------------------------
Consolidated $9,180 $1,886 $30,554 $1,401 $1,134
=========================================================================================================
1994
- - ----
Core business $8,112 $1,678 $25,466 $1,529 $1,026
Southern Electric 185 37 1,576 7 24
- - ---------------------------------------------------------------------------------------------------------
Consolidated $8,297 $1,715 $27,042 $1,536 $1,050
=========================================================================================================
1993
- - ----
Core business $8,435 $1,754 $25,131 $1,430 $ 999
Southern Electric 54 11 780 11 12
- - ---------------------------------------------------------------------------------------------------------
Consolidated $8,489 $1,765 $25,911 $1,441 $1,011
=========================================================================================================
</TABLE>
II-37
<PAGE>
NOTES (continued)
The Southern Company and Subsidiary Companies 1995 Annual Report
Geographic Areas
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Gross Depreciation
Operating Operating Total Property and
Year Revenues Income Assets Additions Amortization
- - ---------------- ----------------------------------------------------------------------
(in millions)
1995
- - ----
Domestic $8,619 $1,813 $26,049 $1,278 $1,087
International 561 73 4,505 123 47
- - ---------------------------------------------------------------------------------------------------
Total $9,180 $1,886 $30,554 $1,401 $1,134
===================================================================================================
1994
- - ----
Domestic $8,116 $1,679 $25,875 $1,531 $1,028
International 181 36 1,167 5 22
- - ---------------------------------------------------------------------------------------------------
Total $8,297 $1,715 $27,042 $1,536 $1,050
===================================================================================================
1993
- - ----
Domestic $8,435 $1,754 $25,178 $1,435 $1,002
International 54 11 733 6 9
- - ---------------------------------------------------------------------------------------------------
Total $8,489 $1,765 $25,911 $1,441 $1,011
===================================================================================================
</TABLE>
<TABLE>
<CAPTION>
16. QUARTERLY FINANCIAL INFORMATION (Unaudited)
Summarized quarterly financial data for 1995 and 1994 are as follows:
<S> <C> <C> <C> <C> <C> <C> <C>
Per Common Share
-----------------------------------------------------
Operating Operating Consolidated Price Range
Quarter Ended Revenues Income Net Income Earnings Dividends High Low
--------------- ------------------------------------------ ------------------------------------------------------
(in millions)
March 1995 $1,929 $385 $206 $0.31 $0.305 21 1/2 19 3/8
June 1995 2,184 454 268 0.40 0.305 22 7/8 20 1/8
September 1995 2,759 673 469 0.71 0.305 24 21 1/8
December 1995 2,308 374 160 0.24 0.305 25 22 3/4
March 1994 $1,932 $330 $142 $0.22 $0.295 22 18 1/2
June 1994 2,069 440 256 0.39 0.295 20 1/2 17 3/4
September 1994 2,381 607 416 0.64 0.295 20 17
December 1994 1,915 338 175 0.27 0.295 21 18 1/4
---------------------------------------------------------------------------------------------------------------------------------
Earnings for 1994 declined by $61 million or 9 cents per share as a result of work force reduction programs primarily recorded in
the first quarter. The company's business is influenced by seasonal weather conditions.
</TABLE>
II-38
<PAGE>
<TABLE>
<CAPTION>
SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA
The Southern Company and Subsidiary Companies 1995 Annual Report
<S> <C> <C> <C>
=====================================================================================================
1995 1994 1993
- - -----------------------------------------------------------------------------------------------------
Operating Revenues (in millions) $9,180 $8,297 $8,489
Consolidated Net Income (in millions) $1,103 $989 $1,002
Earnings Per Share of Common Stock $1.66 $1.52 $1.57
Cash Dividends Paid Per Share of Common Stock $1.22 $1.18 $1.14
Return on Average Common Equity (percent) 13.01 12.47 13.43
Total Assets (in millions) $30,554 $27,042 $25,911
Gross Property Additions (in millions) $1,401 $1,536 $1,441
- - -----------------------------------------------------------------------------------------------------
Capitalization (in millions):
Common stock equity $8,772 $8,186 $7,684
Preferred stock 1,432 1,432 1,333
Long-term debt 8,306 7,593 7,412
- - -----------------------------------------------------------------------------------------------------
Total excluding amounts due within one year $18,510 $17,211 $16,429
=====================================================================================================
Capitalization Ratios (per(percent):
Common stock equity 47.4 47.6 46.8
Preferred stock 7.7 8.3 8.1
Long-term debt 44.9 44.1 45.1
- - -----------------------------------------------------------------------------------------------------
Total excluding amounts due within one year 100.0 100.0 100.0
=====================================================================================================
Other Common Stock Data:
Book value per share (year-end) $13.10 $12.47 $11.96
Market price per share:
High 25 22 23 5/8
Low 19 3/8 17 18 3/8
Close 24 5/8 20 22
Market-to-book ratio (year-end) (percent) 188.0 160.4 183.9
Price-earnings ratio (year-end) (times) 14.8 13.2 14.0
Dividends paid (in millions) $811 $766 $726
Dividend yield (year-end) (percent) 5.0 5.9 5.2
Dividend payout ratio (percent) 73.5 77.5 72.4
Cash coverage of dividends (year-end)(times) 2.9 2.7 2.9
Proceeds from sales of stock (in millions) $277 $279 $204
Shares outstanding (in thousands):
Average 665,064 649,927 637,319
Year-end 669,543 656,528 642,662
Stockholders of record (year-end) 225,739 234,927 237,105
- - -----------------------------------------------------------------------------------------------------
First Mortgage Bonds (in millions):
Issued $375 $185 $2,185
Retired 538 241 2,178
Preferred Stock (in millions):Issued $-- $100 $426
Retired 1 1 516
- - -----------------------------------------------------------------------------------------------------
Customers (year-end) (in thousands):
Residential 3,100 3,046 2,996
Commercial 450 439 427
Industrial 17 17 18
Other 5 5 4
- - -----------------------------------------------------------------------------------------------------
Total 3,572 3,507 3,445
=====================================================================================================
Employees (year-end):
Core business 26,452 27,480 28,516
Southern Electric 5,430 1,400 745
- - -----------------------------------------------------------------------------------------------------
Total 31,882 28,880 29,261
=====================================================================================================
</TABLE>
II-39
<PAGE>
<TABLE>
<CAPTION>
SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA
The Southern Company and Subsidiary Companies 1995 Annual Report
<S> <C> <C> <C> <C>
===============================================================================================================
1992 1991 1990 1989
- - ---------------------------------------------------------------------------------------------------------------
Operating Revenues (in millions) $8,073 $8,050 $8,053 $7,620
Consolidated Net Income (in millions) $953 $876 $604 $846
Earnings Per Share of Common Stock $1.51 $1.39 $0.96 $1.34
Cash Dividends Paid Per Share of Common Stock $1.10 $1.07 $1.07 $1.07
Return on Average Common Equity (percent) 13.42 12.74 8.85 12.49
Total Assets (in millions) $20,038 $19,863 $19,955 $20,092
Gross Property Additions (in millions) $1,105 $1,123 $1,185 $1,346
- - ---------------------------------------------------------------------------------------------------------------
Capitalization (in millions):
Common stock equity $7,234 $6,976 $6,783 $6,861
Preferred stock 1,359 1,333 1,358 1,400
Long-term debt 7,241 7,992 8,458 8,575
- - ---------------------------------------------------------------------------------------------------------------
Total excluding amounts due within one year $15,834 $16,301 $16,599 $16,836
===============================================================================================================
Capitalization Ratios (per(percent):
Common stock equity 45.7 42.8 40.9 40.8
Preferred stock 8.6 8.2 8.2 8.3
Long-term debt 45.7 49.0 50.9 50.9
- - ---------------------------------------------------------------------------------------------------------------
Total excluding amounts due within one year 100.0 100.0 100.0 100.0
===============================================================================================================
Other Common Stock Data:
Book value per share (year-end) $11.43 $11.05 $10.74 $10.87
Market price per share:
High 19 1/2 17 3/8 14 5/8 14 7/8
Low 15 1/8 12 7/8 11 1/2 11
Close 19 1/4 17 1/8 13 7/8 14 1/2
Market-to-book ratio (year-end) (percent) 168.4 155.5 129.7 134.0
Price-earnings ratio (year-end) (times) 12.7 12.4 14.6 10.9
Dividends paid (in millions) $695 $676 $676 $675
Dividend yield (year-end) (percent) 5.7 6.2 7.7 7.3
Dividend payout ratio (percent) 72.9 77.1 111.8 79.8
Cash coverage of dividends (year-end) (times) 2.8 2.5 2.8 2.6
Proceeds from sales of stock (in millions) $30 $-- $-- $4
Shares outstanding (in thousands):
Average 631,844 631,307 631,307 631,303
Year-end 632,917 631,307 631,307 631,307
Stockholders of record (year-end) 247,378 254,568 263,046 273,751
- - ---------------------------------------------------------------------------------------------------------------
First Mortgage Bonds (in millions):
Issued $1,815 $380 $300 $280
Retired 2,575 881 146 201
Preferred Stock (in millions):
Issued $410 $100 $-- $--
Retired 326 125 96 21
- - ---------------------------------------------------------------------------------------------------------------
Customers (year-end) (in thousands):
Residential 2,950 2,903 2,865 2,824
Commercial 414 403 396 392
Industrial 18 18 18 18
Other 4 4 4 4
- - ---------------------------------------------------------------------------------------------------------------
Total 3,386 3,328 3,283 3,238
===============================================================================================================
Employees (year-end):
Core business 28,872 30,144 30,087 30,368
Southern Electric 213 258 176 162
- - ---------------------------------------------------------------------------------------------------------------
Total 29,085 30,402 30,263 30,530
===============================================================================================================
</TABLE>
II-40A
<PAGE>
<TABLE>
<CAPTION>
SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA
The Southern Company and Subsidiary Companies 1995 Annual Report
<S> <C> <C> <C> <C>
===============================================================================================================
1988 1987 1986 1985
- - ---------------------------------------------------------------------------------------------------------------
Operating Revenues (in millions) $7,287 $7,204 $7,033 $6,999
Consolidated Net Income (in millions) $846 $577 $903 $845
Earnings Per Share of Common Stock $1.36 $0.96 $1.56 $1.56
Cash Dividends Paid Per Share of Common Stock $1.07 $1.07 $1.0325 $0.975
Return on Average Common Equity (percent) 13.03 9.27 15.61 16.59
Total Asset (in millions) $19,731 19,518 $18,483 $16,855
Gross Property Additions (in millions) $1,754 $1,853 $2,367 $2,242
- - ---------------------------------------------------------------------------------------------------------------
Capitalization (in millions):
Common stock equity $6,686 $6,307 $6,133 $5,443
Preferred stock 1,465 1,363 1,392 1,308
Long-term debt 8,433 8,333 7,812 7,220
- - ---------------------------------------------------------------------------------------------------------------
Total excluding amounts due within one year $16,584 $16,003 $15,337 $13,971
===============================================================================================================
Capitalization Ratios (per(percent):
Common stock equity 40.3 39.4 40.0 38.9
Preferred stock 8.8 8.5 9.1 9.4
Long-term debt 50.9 52.1 50.9 51.7
- - ---------------------------------------------------------------------------------------------------------------
Total excluding amounts due within one year 100.0 100.0 100.0 100.0
===============================================================================================================
Other Common Stock Data:
Book value per share (year-end) $10.60 $10.28 $10.35 $9.72
Market price per share:
High 12 1/8 14 1/2 13 5/8 11 5/8
Low 10 1/8 8 7/8 10 1/8 8 7/8
Close 11 1/8 11 1/8 12 5/8 11 1/8
Market-to-book ratio (year-end)(percent) 105.5 108.8 122.5 114.5
Price-earnings ratio (year-end) (times) 8.2 11.7 8.2 7.1
Dividends paid (in millions) $661 $628 $583 $512
Dividend yield (year-end) (percent) 9.6 9.6 8.4 9.2
Dividend payout ratio (percent) 78.1 108.9 64.6 60.6
Cash coverage of dividends (year-end) (times) 2.3 2.0 2.7 2.6
Proceeds from sales of stock (in millions) $194 $247 $379 $373
Shares outstanding (in thousands):
Average 622,292 601,390 580,252 541,244
Year-end 630,898 613,565 592,364 560,063
Stockholders of record (year-end) 290,725 296,079 297,302 318,221
- - ---------------------------------------------------------------------------------------------------------------
First Mortgage Bonds (in millions):
Issued $335 $700 $735 $20
Retired 273 369 875 69
Preferred Stock (in millions):
Issued $120 $125 $100 $150
Retired 10 160 53 6
- - ---------------------------------------------------------------------------------------------------------------
Customers (year-end) (in thousands):
Residential 2,781 2,733 2,675 2,611
Commercial 384 374 362 348
Industrial 18 18 17 17
Other 4 4 4 4
- - ---------------------------------------------------------------------------------------------------------------
Total 3,187 3,129 3,058 2,980
===============================================================================================================
Employees (year-end):
Core business 32,366 32,557 32,321 32,335
Southern Electric 157 55 37 19
- - ---------------------------------------------------------------------------------------------------------------
Total 32,523 32,612 32,358 32,354
===============================================================================================================
</TABLE>
II-40B
<PAGE>
<TABLE>
<CAPTION>
SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA (continued)
The Southern Company and Subsidiary Companies 1995 Annual Report
<S> <C> <C> <C>
==============================================================================================
1995 1994 1993
- - ----------------------------------------------------------------------------------------------
Operating Revenues (in millions):
Residential $2,840 $2,560 $2,696
Commercial 2,485 2,357 2,313
Industrial 2,206 2,162 2,200
Other 72 70 68
- - ----------------------------------------------------------------------------------------------
Total retail 7,603 7,149 7,277
Sales for resale within service area 399 360 447
Sales for resale outside service area 415 505 613
- - ----------------------------------------------------------------------------------------------
Total revenues from sales of electricity 8,417 8,014 8,337
Other revenues 763 283 152
- - ----------------------------------------------------------------------------------------------
Total $9,180 $8,297 $8,489
==============================================================================================
Kilowatt-Hour Sales (in millions):
Residential 39,147 35,836 36,807
Commercial 35,938 34,080 32,847
Industrial 51,644 50,311 48,738
Other 863 844 814
- - ----------------------------------------------------------------------------------------------
Total retail 127,592 121,071 119,206
Sales for resale within service area 9,472 8,151 13,258
Sales for resale outside service area 9,143 10,769 12,445
- - ----------------------------------------------------------------------------------------------
Total 146,207 139,991 144,909
==============================================================================================
Average Revenue Per Kilowatt-Hour (cents):
Residential 7.25 7.14 7.32
Commercial 6.91 6.92 7.04
Industrial 4.27 4.30 4.51
Total retail 5.96 5.90 6.10
Sales for resale 4.38 4.57 4.12
Total sales 5.76 5.72 5.75
Average Annual Kilowatt-Hour Use Per Residential Customer 12,722 11,851 12,378
Average Annual Revenue Per Residential Customer $922.83 $846.48 $906.60
Plant Nameplate Capacity Ratings (year-end)(megawatts) 30,733 29,932 29,513
Maximum Peak-Hour Demand (megawatts):
Winter 21,422 22,254 19,432
Summer 27,420 24,546 25,937
System Reserve Margin (at peak) (percent) 9.4 19.3 13.2
Annual Load Factor (percent) 59.5 63.5 59.4
Plant Availability (percent):
Fossil-steam 86.7 85.2 87.9
Nuclear 88.3 89.8 85.9
- - ----------------------------------------------------------------------------------------------
Source of Energy Supply (percent):
Coal 72.5 70.8 73.0
Nuclear 16.4 17.9 16.3
Hydro 4.1 4.7 3.9
Oil and gas 1.7 0.9 0.9
Purchased power 5.3 5.7 5.9
- - ----------------------------------------------------------------------------------------------
Total 100.0 100.0 100.0
==============================================================================================
Total Fuel Economy Data:
BTU per net kilowatt-hour generated 10,099 10,010 9,994
Cost of fuel per million BTU (cents) 151.70 155.81 166.85
Average cost of fuel per net kilowatt-hour generated (cents) 1.53 1.56 1.67
- - ----------------------------------------------------------------------------------------------
</TABLE>
II-41
<PAGE>
<TABLE>
<CAPTION>
SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA (continued)
The Southern Company and Subsidiary Companies 1995 Annual Report
<S> <C> <C> <C>
===================================================================================================================
1992 1991 1990 1989
- - -------------------------------------------------------------------------------------------------------------------
Operating Revenues (in millions):
Residential $2,402 $2,391 $2,342 $2,194
Commercial 2,181 2,122 2,062 1,965
Industrial 2,126 2,088 2,085 2,011
Other 64 65 64 60
- - -------------------------------------------------------------------------------------------------------------------
Total retail 6,773 6,666 6,553 6,230
Sales for resale within service area 409 417 412 401
Sales for resale outside service area 797 884 977 928
- - -------------------------------------------------------------------------------------------------------------------
Total revenues from sales of electricity 7,979 7,967 7,942 7,559
Other revenues 94 83 111 161
- - -------------------------------------------------------------------------------------------------------------------
Total $8,073 $8,050 $8,053 $7,620
===================================================================================================================
Kilowatt-Hour Sales (in millions):
Residential 33,627 33,622 33,118 31,627
Commercial 31,025 30,379 29,658 28,454
Industrial 47,816 46,050 45,974 45,022
Other 777 817 806 787
- - -------------------------------------------------------------------------------------------------------------------
Total retail 113,245 110,868 109,556 105,890
Sales for resale within service area 12,107 12,320 11,134 11,419
Sales for resale outside service area 16,632 19,839 24,402 24,228
- - -------------------------------------------------------------------------------------------------------------------
Total 141,984 143,027 145,092 141,537
===================================================================================================================
Average Revenue Per Kilowatt-Hour (cents):
Residential 7.14 7.11 7.07 6.94
Commercial 7.03 6.99 6.96 6.91
Industrial 4.45 4.53 4.53 4.47
Total retail 5.98 6.01 5.98 5.88
Sales for resale 4.20 4.05 3.91 3.73
Total sales 5.62 5.57 5.47 5.34
Average Annual Kilowatt-Hour Use Per Residential Customer 11,490 11,659 11,637 11,287
Average Annual Revenue Per Residential Customer $820.67 $829.18 $822.93 $782.90
Plant Nameplate Capacity Ratings (year-end)(megawatts) 29,830 29,915 29,532 29,532
Maximum Peak-Hour Demand (megawatts):
Winter 19,121 19,166 17,629 20,772
Summer 24,146 25,261 25,981 24,399
System Reserve Margin (at peak) (percent) 14.3 16.5 14.0 21.0
Annual Load Factor (percent) 60.3 58.3 56.6 58.6
Plant Availability (percent):
Fossil-steam 88.6 91.3 91.9 92.2
Nuclear 85.2 83.4 83.0 87.0
- - -------------------------------------------------------------------------------------------------------------------
Source of Energy Supply (percent):
Coal 71.7 72.6 72.1 71.5
Nuclear 16.2 16.2 15.6 15.7
Hydro 4.6 4.4 4.4 5.2
Oil and gas 0.5 0.6 1.3 1.1
Purchased power 7.0 6.2 6.6 6.5
- - -------------------------------------------------------------------------------------------------------------------
100.0 100.0 100.0 100.0
Total
===================================================================================================================
Total Fuel Economy Data:
BTU per net kilowatt-hour generated 9,976 10,022 10,065 10,086
Cost of fuel per million BTU (cents) 162.58 168.28 172.81 171.00
Average cost of fuel per net kilowatt-hour generated (cents) 1.62 1.69 1.74 1.72
- - -------------------------------------------------------------------------------------------------------------------
</TABLE>
II-42A
<PAGE>
<TABLE>
<CAPTION>
SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA (continued)
The Southern Company and Subsidiary Companies 1995 Annual Report
<S> <C> <C> <C> <C>
=================================================================================================================
1988 1987 1986 1985
- - -----------------------------------------------------------------------------------------------------------------
Operating Revenues (in millions):
Residential $2,103 $2,042 $1,996 $1,825
Commercial 1,835 1,692 1,613 1,512
Industrial 1,945 1,870 1,845 1,830
Other 56 54 52 50
- - -----------------------------------------------------------------------------------------------------------------
Total retail 5,939 5,658 5,506 5,217
Sales for resale within service area 480 461 511 436
Sales for resale outside service area 777 1,028 957 1,289
- - -----------------------------------------------------------------------------------------------------------------
Total revenues from sales of electricity 7,196 7,147 6,974 6,942
Other revenues 91 57 59 57
- - -----------------------------------------------------------------------------------------------------------------
Total $7,287 $7,204 $7,033 $6,999
=================================================================================================================
Kilowatt-Hour Sales (in millions):
Residential 31,041 30,583 29,501 27,088
Commercial 27,005 25,593 24,166 22,512
Industrial 43,675 42,113 40,503 39,804
Other 763 737 723 713
- - -----------------------------------------------------------------------------------------------------------------
Total retail 102,484 99,026 94,893 90,117
Sales for resale within service area 14,806 13,282 14,347 11,079
Sales for resale outside service area 15,860 22,905 16,909 27,881
- - -----------------------------------------------------------------------------------------------------------------
Total 133,150 135,213 126,149 129,077
=================================================================================================================
Average Revenue Per Kilowatt-Hour (cents):
Residential 6.77 6.68 6.77 6.74
Commercial 6.79 6.61 6.67 6.71
Industrial 4.45 4.44 4.56 4.60
Total retail 5.80 5.71 5.80 5.79
Sales for resale 4.10 4.11 4.69 4.43
Total sales 5.40 5.29 5.53 5.38
Average Annual Kilowatt-Hour Use Per Residential Customer 11,255 11,307 11,157 10,515
Average Annual Revenue Per Residential Customer $762.42 $754.96 $754.93 $708.46
Plant Nameplate Capacity Ratings (year-end) (megawatts) 27,552 27,610 26,262 26,262
Maximum Peak-Hour Demand megawatts):
Winter 18,685 18,185 19,665 19,347
Summer 23,641 23,194 23,255 21,778
System Reserve Margin (at peak) (percent) 15.0 16.2 11.4 17.6
Annual Load Factor (percent) 59.8 58.7 57.2 57.4
Plant Availability (percent):
Fossil-steam 91.3 91.2 90.3 90.5
Nuclear 78.4 84.5 74.2 80.3
- - -----------------------------------------------------------------------------------------------------------------
Source of Energy Supply (percent):
Coal 77.7 77.8 79.4 78.5
Nuclear 14.5 13.1 11.5 12.0
Hydro 2.3 3.3 2.2 3.1
Oil and gas 0.7 0.6 0.9 0.3
Purchased power 4.8 5.2 6.0 6.1
- - -----------------------------------------------------------------------------------------------------------------
Total 100.0 100.0 100.0 100.0
=================================================================================================================
Total Fuel Economy Data:
BTU per net kilowatt-hour generated 10,094 10,122 10,171 10,193
Cost of fuel per million BTU (cents) 170.36 176.64 185.89 191.24
Average cost of fuel per net kilowatt-hour generated (cents) 1.72 1.78 1.89 1.95
- - -----------------------------------------------------------------------------------------------------------------
</TABLE>
II-42B
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF INCOME
The Southern Company and Subsidiary Companies
==============================================================================================
For the Years Ended December 31, 1995 1994 1993
- - ----------------------------------------------------------------------------------------------
(Millions of Dollars)
<S> <C> <C> <C>
- - ----------------------------------------------------------------------------------------------
Operating Revenues $ 9,180 $ 8,297 $ 8,489
- - ----------------------------------------------------------------------------------------------
Operating Expenses:
Operation --
Fuel 2,126 2,058 2,265
Purchased power 491 277 336
Proceeds from settlement of disputed contracts - - (3)
Other 1,626 1,505 1,448
Maintenance 683 660 653
Depreciation and amortization 904 821 793
Amortization of deferred Plant Vogtle cost, net 124 75 36
Taxes other than income taxes 535 475 462
Federal and state income taxes 805 711 734
- - ----------------------------------------------------------------------------------------------
Total operating expenses 7,294 6,582 6,724
- - ----------------------------------------------------------------------------------------------
Operating Income 1,886 1,715 1,765
Other Income (Expense):
Allowance for equity funds used during construction 5 11 9
Deferred return on Plant Vogtle - - -
Write-off of Plant Vogtle costs - - -
Income tax reduction for write-off of Plant Vogtle costs - - -
Interest income 38 32 30
Other, net (65) (28) (34)
Income taxes applicable to other income 36 26 57
- - ----------------------------------------------------------------------------------------------
Income Before Interest Charges 1,900 1,756 1,827
- - ----------------------------------------------------------------------------------------------
Interest Charges and Preferred Dividends:
Interest on long-term debt 557 568 595
Allowance for debt funds used during construction (20) (18) (13)
Interest on interim obligations 63 33 30
Amortization of debt discount, premium, and expense, net 44 30 26
Other interest charges 52 47 87
Minority interest in subsidiaries 13 20 7
Preferred and preference dividends of subsidiary companies 88 87 93
- - ----------------------------------------------------------------------------------------------
Net interest charges and preferred and preference dividends 797 767 825
- - ----------------------------------------------------------------------------------------------
Consolidated Net Income $ 1,103 $ 989 $ 1,002
- - ----------------------------------------------------------------------------------------------
Earnings Per Share of Common Stock $1.66 $1.52 $1.57
Average Number of Shares of Common Stock Outstanding (Thousands) 665,064 649,927 637,319
==============================================================================================
</TABLE>
II-43
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF INCOME
The Southern Company and Subsidiary Companies
==============================================================================================
For the Years Ended December 31, 1992 1991 1990
- - ----------------------------------------------------------------------------------------------
(Millions of Dollars)
<S> <C> <C> <C>
- - ----------------------------------------------------------------------------------------------
Operating Revenues $ 8,073 $ 8,050 $ 8,053
- - ----------------------------------------------------------------------------------------------
Operating Expenses:
Operation --
Fuel 2,114 2,237 2,327
Purchased power 454 468 642
Proceeds from settlement of disputed contracts (7) (181) -
Other 1,317 1,321 1,161
Maintenance 613 637 602
Depreciation and amortization 768 763 749
Amortization of deferred Plant Vogtle cost, net (31) 16 31
Taxes other than income taxes 436 432 397
Federal and state income taxes 647 618 520
- - ----------------------------------------------------------------------------------------------
Total operating expenses 6,311 6,311 6,429
- - ----------------------------------------------------------------------------------------------
Operating Income 1,762 1,739 1,624
Other Income (Expense):
Allowance for equity funds used during construction 10 13 33
Deferred return on Plant Vogtle - 35 83
Write-off of Plant Vogtle costs - - (281)
Income tax reduction for write-off of Plant Vogtle costs - - 63
Interest income 32 30 28
Other, net (50) (57) (55)
Income taxes applicable to other income 39 21 36
- - ----------------------------------------------------------------------------------------------
Income Before Interest Charges 1,793 1,781 1,531
- - ----------------------------------------------------------------------------------------------
Interest Charges and Preferred Dividends:
Interest on long-term debt 684 757 788
Allowance for debt funds used during construction (12) (18) (34)
Interest on interim obligations 16 20 22
Amortization of debt discount, premium, and expense, net 14 9 10
Other interest charges 34 29 26
Minority interest in subsidiaries - - -
Preferred and preference dividends of subsidiary companies 104 108 115
- - ----------------------------------------------------------------------------------------------
Net interest charges and preferred and preference dividends 840 905 927
- - ----------------------------------------------------------------------------------------------
Consolidated Net Income $ 953 $ 876 $ 604
==============================================================================================
Earnings Per Share of Common Stock $1.51 $1.39 $0.96
Average Number of Shares of Common Stock Outstanding (Thousands) 631,844 631,307 631,307
==============================================================================================
</TABLE>
II-44A
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF INCOME
The Southern Company and Subsidiary Companies
==============================================================================================
For the Years Ended December 31, 1989 1988 1987
- - ----------------------------------------------------------------------------------------------
(Millions of Dollars)
<S> <C> <C> <C>
- - ----------------------------------------------------------------------------------------------
Operating Revenues $ 7,620 $ 7,287 $ 7,204
- - ----------------------------------------------------------------------------------------------
Operating Expenses:
Operation --
Fuel 2,241 2,213 2,303
Purchased power 575 562 552
Proceeds from settlement of disputed contracts - - -
Other 1,103 1,167 1,219
Maintenance 542 547 574
Depreciation and amortization 698 632 563
Amortization of deferred Plant Vogtle cost, net (39) (8) (142)
Taxes other than income taxes 356 362 349
Federal and state income taxes 525 412 517
- - ----------------------------------------------------------------------------------------------
Total operating expenses 6,001 5,887 5,935
- - ----------------------------------------------------------------------------------------------
Operating Income 1,619 1,400 1,269
Other Income (Expense):
Allowance for equity funds used during construction 71 138 190
Deferred return on Plant Vogtle 48 107 115
Write-off of Plant Vogtle costs - - (358)
Income tax reduction for write-off of Plant Vogtle costs - - 129
Interest income 28 46 77
Other, net (50) (30) (59)
Income taxes applicable to other income 30 23 19
- - ----------------------------------------------------------------------------------------------
Income Before Interest Charges 1,746 1,684 1,382
- - ----------------------------------------------------------------------------------------------
Interest Charges and Preferred Dividends:
Interest on long-term debt 791 784 776
Allowance for debt funds used during construction (63) (130) (157)
Interest on interim obligations 12 22 24
Amortization of debt discount, premium, and expense, net 11 10 8
Other interest charges 26 32 29
Minority interest in subsidiaries - - -
Preferred and preference dividends of subsidiary companies 123 120 125
- - ----------------------------------------------------------------------------------------------
Net interest charges and preferred and preference dividends 900 838 805
- - ----------------------------------------------------------------------------------------------
Consolidated Net Income $ 846 $ 846 $ 577
==============================================================================================
Earnings Per Share of Common Stock $1.34 $1.36 $0.96
Average Number of Shares of Common Stock Outstanding (Thousands) 631,303 622,292 601,390
==============================================================================================
</TABLE>
II-44B
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF INCOME
The Southern Company and Subsidiary Companies
===================================================================================
For the Years Ended December 31, 1986 1985
- - -----------------------------------------------------------------------------------
(Millions of Dollars)
<S> <C> <C>
- - -----------------------------------------------------------------------------------
Operating Revenues $ 7,033 $ 6,999
- - -----------------------------------------------------------------------------------
Operating Expenses:
Operation --
Fuel 2,316 2,431
Purchased power 386 456
Proceeds from settlement of disputed contracts - -
Other 1,045 941
Maintenance 576 562
Depreciation and amortization 510 471
Amortization of deferred Plant Vogtle cost, net - -
Taxes other than income taxes 315 303
Federal and state income taxes 672 649
- - -----------------------------------------------------------------------------------
Total operating expenses 5,820 5,813
- - -----------------------------------------------------------------------------------
Operating Income 1,213 1,186
Other Income (Expense):
Allowance for equity funds used during construction 312 269
Deferred return on Plant Vogtle - -
Write-off of Plant Vogtle costs - -
Income tax reduction for write-off of Plant Vogtle costs - -
Interest income 66 70
Other, net (20) -
Income taxes applicable to other income - (19)
- - -----------------------------------------------------------------------------------
Income Before Interest Charges 1,571 1,506
- - -----------------------------------------------------------------------------------
Interest Charges and Preferred Dividends:
Interest on long-term debt 782 755
Allowance for debt funds used during construction (260) (254)
Interest on interim obligations 4 21
Amortization of debt discount, premium, and expense, net 6 3
Other interest charges 15 17
Minority interest in subsidiaries - -
Preferred and preference dividends of subsidiary companies 121 119
- - -----------------------------------------------------------------------------------
Net interest charges and preferred and preference dividends 668 661
- - -----------------------------------------------------------------------------------
Consolidated Net Income $ 903 $ 845
===================================================================================
Earnings Per Share of Common Stock $1.56 $1.56
Average Number of Shares of Common Stock Outstanding (Thousands) 580,252 541,244
===================================================================================
</TABLE>
II-44C
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
The Southern Company and Subsidiary Companies
================================================================================================
For the Years Ended December 31, 1995 1994 1993
- - ------------------------------------------------------------------------------------------------
(Millions of Dollars)
<S> <C> <C> <C>
Operating Activities:
Net income $ 1,103 $ 989 $ 1,002
Adjustments to reconcile net income to net
cash provided by operating activities --
Depreciation and amortization 1,134 1,050 1,011
Deferred income taxes, net 116 (3) 209
Deferred investment tax credits, net 1 (1) (20)
Allowance for equity funds used during construction (5) (11) (9)
Amortization of deferred Plant Vogtle costs 124 75 36
Write-off of Plant Vogtle costs - - -
Non-cash proceeds from settlement of disputed contracts - - -
Other, net (85) (7) (45)
Changes in certain current assets and liabilities --
Receivables (109) 114 (55)
Inventories 39 (128) 136
Payables (138) 81 43
Taxes accrued - - 3
Other 135 (48) (64)
- - -------------------------------------------------------------------------------------------------
Net cash provided from operating activities 2,315 2,111 2,247
- - -------------------------------------------------------------------------------------------------
Investing Activities:
Gross property additions (1,401) (1,536) (1,441)
Foreign utility operations (1,416) (405) (465)
Sales of property 287 171 262
Other 153 (87) (37)
- - -------------------------------------------------------------------------------------------------
Net cash used for investing activities (2,377) (1,857) (1,681)
- - -------------------------------------------------------------------------------------------------
Financing Activities:
Proceeds:
Common stock 277 279 205
Preferred securities - 100 -
Preferred stock - - 426
First mortgage bonds 375 185 2,185
Pollution control bonds 731 749 386
Other long-term debt 1,074 439 206
Prepaid capacity revenues - - -
Retirements:
Preferred and preference stock (1) (1) (516)
First mortgage bonds (538) (241) (2,178)
Pollution control bonds (721) (732) (351)
Other long-term debt (181) (307) (99)
Interim obligations, net 727 37 114
Payment of common stock dividends (811) (766) (726)
Miscellaneous (237) (35) (137)
- - -------------------------------------------------------------------------------------------------
Net cash provided from (used for) financing activities 695 (293) (485)
- - -------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Cash and Cash Equivalents 633 (39) 81
Cash and Cash Equivalents at Beginning of Year 139 178 97
- - -------------------------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Year $ 772 $ 139 $ 178
=================================================================================================
( ) Denotes use of cash.
</TABLE>
II-45
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
The Southern Company and Subsidiary Companies
==================================================================================================
For the Years Ended December 31, 1992 1991 1990
- - --------------------------------------------------------------------------------------------------
(Millions of Dollars)
<S> <C> <C> <C>
Operating Activities:
Net income $ 953 $ 876 $ 604
Adjustments to reconcile net income to net
cash provided by operating activities --
Depreciation and amortization 969 968 982
Deferred income taxes, net 221 26 158
Deferred investment tax credits, net (6) (11) -
Allowance for equity funds used during construction (10) (13) (33)
Amortization of deferred Plant Vogtle costs (31) (19) (52)
Write-off of Plant Vogtle costs - - 281
Non-cash proceeds from settlement of disputed contracts (7) (141) -
Other, net (25) 45 (10)
Changes in certain current assets and liabilities --
Receivables (10) 68 8
Inventories (23) 20 (82)
Payables 35 (13) (41)
Taxes accrued (62) 107 (5)
Other (9) (46) (34)
- - --------------------------------------------------------------------------------------------------
Net cash provided from operating activities 1,995 1,867 1,776
- - --------------------------------------------------------------------------------------------------
Investing Activities:
Gross property additions (1,105) (1,123) (1,185)
Foreign utility operations - - -
Sales of property 44 291 35
Other 61 (45) 14
- - --------------------------------------------------------------------------------------------------
Net cash used for investing activities (1,000) (877) (1,136)
- - --------------------------------------------------------------------------------------------------
Financing Activities:
Proceeds:
Common stock 30 - -
Preferred securities - - -
Preferred stock 410 100 -
First mortgage bonds 1,815 380 300
Pollution control bonds 208 126 -
Other long-term debt 48 14 74
Prepaid capacity revenues - 53 -
Retirements:
Preferred and preference stock (326) (125) (96)
First mortgage bonds (2,575) (881) (146)
Pollution control bonds (208) (130) (3)
Other long-term debt (88) (70) (207)
Interim obligations, net 525 180 78
Payment of common stock dividends (695) (676) (676)
Miscellaneous (148) (41) (8)
- - --------------------------------------------------------------------------------------------------
Net cash provided from (used for) financing activities (1,004) (1,070) (684)
- - --------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Cash and Cash Equivalents (9) (80) (44)
Cash and Cash Equivalents at Beginning of Year 106 186 230
- - --------------------------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Year $ 97 $ 106 $ 186
==================================================================================================
( ) Denotes use of cash.
</TABLE>
II-46A
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
The Southern Company and Subsidiary Companies
==========================================================================================================
For the Years Ended December 31, 1989 1988 1987
- - ----------------------------------------------------------------------------------------------------------
(Millions of Dollars)
<S> <C> <C> <C>
Operating Activities:
Net income $ 846 $ 846 $ 577
Adjustments to reconcile net income to net
cash provided by operating activities --
Depreciation and amortization 951 837 742
Deferred income taxes, net 225 206 198
Deferred investment tax credits, net (1) 27 20
Allowance for equity funds used during construction (71) (138) (190)
Amortization of deferred Plant Vogtle costs (87) (115) (257)
Write-off of Plant Vogtle costs - - 358
Non-cash proceeds from settlement of disputed contracts - - -
Other, net (28) 46 87
Changes in certain current assets and liabilities --
Receivables (123) (21) (113)
Inventories 6 (47) (62)
Payables (23) (6) 125
Taxes accrued (15) 29 (34)
Other 156 (40) 42
- - ----------------------------------------------------------------------------------------------------------
Net cash provided from operating activities 1,836 1,624 1,493
- - ----------------------------------------------------------------------------------------------------------
Investing Activities:
Gross property additions (1,346) (1,754) (1,853)
Foreign utility operations - - -
Sales of property - - 12
Other 54 (2) 64
- - ----------------------------------------------------------------------------------------------------------
Net cash used for investing activities (1,292) (1,756) (1,777)
- - ----------------------------------------------------------------------------------------------------------
Financing Activities:
Proceeds:
Common stock 4 194 247
Preferred securities - - -
Preferred stock - 120 125
First mortgage bonds 280 335 700
Pollution control bonds 104 73 228
Other long-term debt 74 68 81
Prepaid capacity revenues - - -
Retirements:
Preferred and preference stock (21) (10) (160)
First mortgage bonds (201) (273) (369)
Pollution control bonds (55) (1) (122)
Other long-term debt (83) (108) (56)
Interim obligations, net 27 (300) 313
Payment of common stock dividends (675) (661) (628)
Miscellaneous (10) (20) (58)
- - ----------------------------------------------------------------------------------------------------------
Net cash provided from (used for) financing activities (556) (583) 301
- - ----------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Cash and Cash Equivalents (12) (715) 17
Cash and Cash Equivalents at Beginning of Year 242 957 940
- - ----------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Year $ 230 $ 242 $ 957
==========================================================================================================
( ) Denotes use of cash.
</TABLE>
II-46B
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
The Southern Company and Subsidiary Companies
========================================================================================
For the Years Ended December 31, 1986 1985
- - ----------------------------------------------------------------------------------------
(Millions of Dollars)
<S> <C> <C>
Operating Activities:
Net income $ 903 $ 845
Adjustments to reconcile net income to net
cash provided by operating activities --
Depreciation and amortization 674 623
Deferred income taxes, net 465 242
Deferred investment tax credits, net 132 184
Allowance for equity funds used during construction (312) (269)
Amortization of deferred Plant Vogtle costs - -
Write-off of Plant Vogtle costs - -
Non-cash proceeds from settlement of disputed contracts - -
Other, net 15 17
Changes in certain current assets and liabilities --
Receivables 38 (89)
Inventories (37) 127
Payables 48 38
Taxes accrued 24 (65)
Other (56) 84
- - ----------------------------------------------------------------------------------------
Net cash provided from operating activities 1,894 1,737
- - ----------------------------------------------------------------------------------------
Investing Activities:
Gross property additions (2,367) (2,242)
Foreign utility operations - -
Sales of property - 1
Other 46 126
- - ----------------------------------------------------------------------------------------
Net cash used for investing activities (2,321) (2,115)
- - ----------------------------------------------------------------------------------------
Financing Activities:
Proceeds:
Common stock 379 373
Preferred securities - -
Preferred stock 100 150
First mortgage bonds 735 20
Pollution control bonds 386 635
Other long-term debt 367 68
Prepaid capacity revenues 100 -
Retirements:
Preferred and preference stock (53) (6)
First mortgage bonds (875) (69)
Pollution control bonds (21) -
Other long-term debt (55) (54)
Interim obligations, net (37) (77)
Payment of common stock dividends (583) (512)
Miscellaneous (82) (24)
- - ----------------------------------------------------------------------------------------
Net cash provided from (used for) financing activities 361 504
- - ----------------------------------------------------------------------------------------
Net Increase (Decrease) in Cash and Cash Equivalents (66) 126
Cash and Cash Equivalents at Beginning of Year 1,006 880
- - ----------------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Year $ 940 $ 1,006
========================================================================================
( ) Denotes use of cash.
</TABLE>
II-46C
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
The Southern Company and Subsidiary Companies
============================================================================================================================
At December 31, 1995 1994 1993
- - ----------------------------------------------------------------------------------------------------------------------------
(Millions of Dollars)
<S> <C> <C> <C>
ASSETS
Electric Plant:
Production-
Fossil $ 8,533 $ 8,778 $ 8,006
Nuclear 5,956 5,942 5,930
Hydro 1,477 1,341 1,263
- - ----------------------------------------------------------------------------------------------------------------------------
Total production 15,966 16,061 15,199
Transmission 3,452 3,504 3,224
Distribution 7,583 7,243 6,848
General 2,436 2,380 2,395
SEI utility plant 2,420 - -
Construction work in progress 990 1,247 1,031
Nuclear fuel, at amortized cost 225 238 229
- - ----------------------------------------------------------------------------------------------------------------------------
Total electric plant 33,072 30,673 28,926
- - ----------------------------------------------------------------------------------------------------------------------------
Steam Heat Plant 21 21 21
- - ----------------------------------------------------------------------------------------------------------------------------
Total utility plant 33,093 30,694 28,947
- - ----------------------------------------------------------------------------------------------------------------------------
Accumulated Provision for Depreciation:
Electric 10,056 9,567 8,924
Steam heat 11 10 10
- - ----------------------------------------------------------------------------------------------------------------------------
Total accumulated provision for depreciation 10,067 9,577 8,934
- - ----------------------------------------------------------------------------------------------------------------------------
Total 23,026 21,117 20,013
- - ----------------------------------------------------------------------------------------------------------------------------
Less property-related accumulated deferred income taxes - - -
- - ----------------------------------------------------------------------------------------------------------------------------
Total 23,026 21,117 20,013
- - ----------------------------------------------------------------------------------------------------------------------------
Other Property and Investments:
Securities received from settlement of disputed contracts - - -
Argentine operating concession, being amortized 431 446 469
Nuclear decommissioning trusts 201 125 88
Miscellaneous 661 236 179
- - ----------------------------------------------------------------------------------------------------------------------------
Total 1,293 807 736
- - ----------------------------------------------------------------------------------------------------------------------------
Current Assets:
Cash and cash equivalents 772 139 178
Investment securities - - -
Receivables, net 1,172 840 962
Accrued utility revenues 347 218 185
Fossil fuel stock, at average cost 327 354 254
Materials and supplies, at average cost 552 553 535
Prepayments 266 194 148
Vacation pay deferred 74 70 73
- - ----------------------------------------------------------------------------------------------------------------------------
Total 3,510 2,368 2,335
- - ----------------------------------------------------------------------------------------------------------------------------
Deferred Charges:
Deferred charges related to income taxes 1,386 1,454 1,546
Deferred Plant Vogtle costs 308 432 507
Deferred fuel charges 34 47 70
Debt expense, being amortized 100 48 33
Premium on reacquired debt, being amortized 295 298 288
Miscellaneous 602 471 383
- - ----------------------------------------------------------------------------------------------------------------------------
Total 2,725 2,750 2,827
- - ----------------------------------------------------------------------------------------------------------------------------
Total Assets $ 30,554 $ 27,042 $ 25,911
============================================================================================================================
</TABLE>
II-47
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
The Southern Company and Subsidiary Companies
============================================================================================================================
At December 31, 1992 1991 1990
- - ----------------------------------------------------------------------------------------------------------------------------
(Millions of Dollars)
<S> <C> <C> <C>
ASSETS
Electric Plant:
Production-
Fossil $ 8,033 $ 7,997 $ 7,661
Nuclear 5,912 5,902 5,820
Hydro 1,253 1,247 1,222
- - ----------------------------------------------------------------------------------------------------------------------------
Total production 15,198 15,146 14,703
Transmission 3,093 2,955 2,824
Distribution 6,430 6,092 5,738
General 2,291 2,196 2,078
SEI utility plant - - -
Construction work in progress 665 603 1,092
Nuclear fuel, at amortized cost 257 301 354
- - ----------------------------------------------------------------------------------------------------------------------------
Total electric plant 27,934 27,293 26,789
- - ----------------------------------------------------------------------------------------------------------------------------
Steam Heat Plant 21 20 20
- - ----------------------------------------------------------------------------------------------------------------------------
Total utility plant 27,955 27,313 26,809
- - ----------------------------------------------------------------------------------------------------------------------------
Accumulated Provision for Depreciation:
Electric 8,271 7,676 7,079
Steam heat 9 8 8
- - ----------------------------------------------------------------------------------------------------------------------------
Total accumulated provision for depreciation 8,280 7,684 7,087
- - ----------------------------------------------------------------------------------------------------------------------------
Total 19,675 19,629 19,722
- - ----------------------------------------------------------------------------------------------------------------------------
Less property-related accumulated deferred income taxes 3,186 3,020 2,911
- - ----------------------------------------------------------------------------------------------------------------------------
Total 16,489 16,609 16,811
- - ----------------------------------------------------------------------------------------------------------------------------
Other Property and Investments:
Securities received from settlement of disputed contracts - 202 -
Argentine operating concession, being amortized - - -
Nuclear decommissioning trusts 52 26 2
Miscellaneous 75 83 83
- - ----------------------------------------------------------------------------------------------------------------------------
Total 127 311 85
- - ----------------------------------------------------------------------------------------------------------------------------
Current Assets:
Cash and cash equivalents 97 106 186
Investment securities 199 - -
Receivables, net 742 723 793
Accrued utility revenues 177 160 151
Fossil fuel stock, at average cost 392 445 467
Materials and supplies, at average cost 533 457 456
Prepayments 220 222 193
Vacation pay deferred 70 70 64
- - ----------------------------------------------------------------------------------------------------------------------------
Total 2,430 2,183 2,310
- - ----------------------------------------------------------------------------------------------------------------------------
Deferred Charges:
Deferred charges related to income taxes - - -
Deferred Plant Vogtle costs 383 375 364
Deferred fuel charges 89 106 126
Debt expense, being amortized 28 23 23
Premium on reacquired debt, being amortized 222 126 99
Miscellaneous 270 130 137
- - ----------------------------------------------------------------------------------------------------------------------------
Total 992 760 749
- - ----------------------------------------------------------------------------------------------------------------------------
Total Assets $ 20,038 $ 19,863 $ 19,955
============================================================================================================================
</TABLE>
II-48A
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
The Southern Company and Subsidiary Companies
============================================================================================================================
At December 31, 1989 1988 1987
- - ----------------------------------------------------------------------------------------------------------------------------
(Millions of Dollars)
<S> <C> <C> <C>
ASSETS
Electric Plant:
Production-
Fossil $ 7,565 $ 6,226 $ 6,157
Nuclear 5,976 4,995 4,987
Hydro 1,215 1,197 1,192
- - ----------------------------------------------------------------------------------------------------------------------------
Total production 14,756 12,418 12,336
Transmission 2,683 2,500 2,388
Distribution 5,365 4,944 4,510
General 2,026 1,865 1,674
SEI utility plant - - -
Construction work in progress 1,006 3,071 2,519
Nuclear fuel, at amortized cost 402 481 479
- - ----------------------------------------------------------------------------------------------------------------------------
Total electric plant 26,238 25,279 23,906
- - ----------------------------------------------------------------------------------------------------------------------------
Steam Heat Plant 20 20 20
- - ----------------------------------------------------------------------------------------------------------------------------
Total utility plant 26,258 25,299 23,926
- - ----------------------------------------------------------------------------------------------------------------------------
Accumulated Provision for Depreciation:
Electric 6,492 5,885 5,355
Steam heat 7 6 6
- - ----------------------------------------------------------------------------------------------------------------------------
Total accumulated provision for depreciation 6,499 5,891 5,361
- - ----------------------------------------------------------------------------------------------------------------------------
Total 19,759 19,408 18,565
- - ----------------------------------------------------------------------------------------------------------------------------
Less property-related accumulated deferred income taxes 2,759 2,559 2,371
- - ----------------------------------------------------------------------------------------------------------------------------
Total 17,000 16,849 16,194
- - ----------------------------------------------------------------------------------------------------------------------------
Other Property and Investments:
Securities received from settlement of disputed contracts - - -
Argentine operating concession, being amortized - - -
Nuclear decommissioning trusts - - -
Miscellaneous 85 88 70
- - ----------------------------------------------------------------------------------------------------------------------------
Total 85 88 70
- - ----------------------------------------------------------------------------------------------------------------------------
Current Assets:
Cash and cash equivalents 230 242 957
Investment securities - - -
Receivables, net 765 687 687
Accrued utility revenues 189 148 139
Fossil fuel stock, at average cost 427 490 513
Materials and supplies, at average cost 413 348 278
Prepayments 192 174 136
Vacation pay deferred 65 63 59
- - ----------------------------------------------------------------------------------------------------------------------------
Total 2,281 2,152 2,769
- - ----------------------------------------------------------------------------------------------------------------------------
Deferred Charges:
Deferred charges related to income taxes - - -
Deferred Plant Vogtle costs 322 270 173
Deferred fuel charges 143 157 112
Debt expense, being amortized 24 24 25
Premium on reacquired debt, being amortized 103 102 95
Miscellaneous 134 89 80
- - ----------------------------------------------------------------------------------------------------------------------------
Total 726 642 485
- - ----------------------------------------------------------------------------------------------------------------------------
Total Assets $ 20,092 $ 19,731 $ 19,518
============================================================================================================================
</TABLE>
II-48B
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
The Southern Company and Subsidiary Companies
===========================================================================================================
At December 31, 1986 1985
- - -----------------------------------------------------------------------------------------------------------
(Millions of Dollars)
<S> <C> <C>
ASSETS
Electric Plant:
Production-
Fossil $ 5,415 $ 5,274
Nuclear 2,490 2,341
Hydro 1,184 1,162
- - -----------------------------------------------------------------------------------------------------------
Total production 9,089 8,777
Transmission 2,254 2,001
Distribution 4,131 3,793
General 1,504 1,243
SEI utility plant - -
Construction work in progress 5,162 4,278
Nuclear fuel, at amortized cost 520 497
- - -----------------------------------------------------------------------------------------------------------
Total electric plant 22,660 20,589
- - -----------------------------------------------------------------------------------------------------------
Steam Heat Plant 35 32
- - -----------------------------------------------------------------------------------------------------------
Total utility plant 22,695 20,621
- - -----------------------------------------------------------------------------------------------------------
Accumulated Provision for Depreciation:
Electric 4,879 4,472
Steam heat 13 11
- - -----------------------------------------------------------------------------------------------------------
Total accumulated provision for depreciation 4,892 4,483
- - -----------------------------------------------------------------------------------------------------------
Total 17,803 16,138
- - -----------------------------------------------------------------------------------------------------------
Less property-related accumulated deferred income taxes 2,212 1,976
- - -----------------------------------------------------------------------------------------------------------
Total 15,591 14,162
- - -----------------------------------------------------------------------------------------------------------
Other Property and Investments:
Securities received from settlement of disputed contracts - -
Argentine operating concession, being amortized - -
Nuclear decommissioning trusts - -
Miscellaneous 69 36
- - -----------------------------------------------------------------------------------------------------------
Total 69 36
- - -----------------------------------------------------------------------------------------------------------
Current Assets:
Cash and cash equivalents 940 1,006
Investment securities - -
Receivables, net 657 685
Accrued utility revenues 83 92
Fossil fuel stock, at average cost 501 503
Materials and supplies, at average cost 228 188
Prepayments 70 22
Vacation pay deferred 56 53
- - -----------------------------------------------------------------------------------------------------------
Total 2,535 2,549
- - -----------------------------------------------------------------------------------------------------------
Deferred Charges:
Deferred charges related to income taxes - -
Deferred Plant Vogtle costs - -
Deferred fuel charges 121 -
Debt expense, being amortized 24 24
Premium on reacquired debt, being amortized 70 -
Miscellaneous 73 84
- - -----------------------------------------------------------------------------------------------------------
Total 288 108
- - -----------------------------------------------------------------------------------------------------------
Total Assets $ 18,483 $ 16,855
===========================================================================================================
</TABLE>
II-48C
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
The Southern Company and Subsidiary Companies
============================================================================================================================
At December 31, 1995 1994 1993
- - ----------------------------------------------------------------------------------------------------------------------------
(Millions of Dollars)
<S> <C> <C> <C>
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock $ 3,348 $ 3,283 $ 3,213
Paid-in capital 1,940 1,711 1,502
Premium on preferred stock 1 1 1
Retained Earnings 3,483 3,191 2,968
- - ----------------------------------------------------------------------------------------------------------------------------
Total common equity 8,772 8,186 7,684
Preferred stock 1,332 1,332 1,332
Preferred stock subject to mandatory redemption - - 1
Subsidiary obligated mandatorily redeemable preferred securities 100 100 -
Long-term debt 8,306 7,593 7,412
- - ----------------------------------------------------------------------------------------------------------------------------
Total (excluding amount due within one year) 18,510 17,211 16,429
- - ----------------------------------------------------------------------------------------------------------------------------
Current Liabilities:
Notes payable to banks 445 575 865
Commercial paper 1,225 403 76
Preferred stock due within one year - 1 1
Long-term debt due within one year 509 228 156
Accounts payable 785 806 698
Customer deposits 216 102 103
Taxes accrued 272 153 206
Interest accrued 199 190 186
Vacation pay accrued 100 87 90
Miscellaneous 530 233 190
- - ----------------------------------------------------------------------------------------------------------------------------
Total 4,281 2,778 2,571
- - ----------------------------------------------------------------------------------------------------------------------------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 4,611 4,007 3,979
Deferred credits related to income taxes 936 987 1,051
Accumulated deferred investment tax credits 820 858 900
Minority interest 231 267 -
Prepaid capacity revenues, net 131 138 144
Disallowed Plant Vogtle capacity buyback costs 59 60 63
Miscellaneous 975 736 774
- - ----------------------------------------------------------------------------------------------------------------------------
Total 7,763 7,053 6,911
- - ----------------------------------------------------------------------------------------------------------------------------
Total Capitalization and Liabilities $ 30,554 $ 27,042 $ 25,911
============================================================================================================================
</TABLE>
II-49
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
The Southern Company and Subsidiary Companies
============================================================================================================================
At December 31, 1992 1991 1990
- - ----------------------------------------------------------------------------------------------------------------------------
(Millions of Dollars)
<S> <C> <C> <C>
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock $ 1,582 $ 1,578 $ 1,578
Paid-in capital 2,929 2,906 2,906
Premium on preferred stock 2 2 3
Retained Earnings 2,721 2,490 2,296
- - ----------------------------------------------------------------------------------------------------------------------------
Total common equity 7,234 6,976 6,783
Preferred stock 1,351 1,207 1,207
Preferred stock subject to mandatory redemption 8 126 151
Subsidiary obligated mandatorily redeemable preferred securities - - -
Long-term debt 7,241 7,992 8,458
- - ----------------------------------------------------------------------------------------------------------------------------
Total (excluding amount due within one year) 15,834 16,301 16,599
- - ----------------------------------------------------------------------------------------------------------------------------
Current Liabilities:
Notes payable to banks 567 302 122
Commercial paper 260 - -
Preferred stock due within one year 65 7 7
Long-term debt due within one year 188 217 308
Accounts payable 646 585 616
Customer deposits 99 95 91
Taxes accrued 172 215 144
Interest accrued 191 221 246
Vacation pay accrued 86 84 75
Miscellaneous 242 229 233
- - ----------------------------------------------------------------------------------------------------------------------------
Total 2,516 1,955 1,842
- - ----------------------------------------------------------------------------------------------------------------------------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes - - -
Deferred credits related to income taxes - - -
Accumulated deferred investment tax credits 957 1,004 1,063
Minority interest - - -
Prepaid capacity revenues, net 148 149 100
Disallowed Plant Vogtle capacity buyback costs 72 110 136
Miscellaneous 511 344 215
- - ----------------------------------------------------------------------------------------------------------------------------
Total 1,688 1,607 1,514
- - ----------------------------------------------------------------------------------------------------------------------------
Total Capitalization and Liabilities $ 20,038 $ 19,863 $ 19,955
============================================================================================================================
</TABLE>
II-50A
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
The Southern Company and Subsidiary Companies
============================================================================================================================
At December 31, 1989 1988 1987
- - ----------------------------------------------------------------------------------------------------------------------------
(Millions of Dollars)
<S> <C> <C> <C>
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock $ 1,578 $ 1,577 $ 1,534
Paid-in capital 2,906 2,903 2,752
Premium on preferred stock 3 3 3
Retained Earnings 2,374 2,203 2,018
- - ----------------------------------------------------------------------------------------------------------------------------
Total common equity 6,861 6,686 6,307
Preferred stock 1,209 1,259 1,139
Preferred stock subject to mandatory redemption 191 206 224
Subsidiary obligated mandatorily redeemable preferred securities - - -
Long-term debt 8,575 8,433 8,333
- - ----------------------------------------------------------------------------------------------------------------------------
Total (excluding amount due within one year) 16,836 16,584 16,003
- - ----------------------------------------------------------------------------------------------------------------------------
Current Liabilities:
Notes payable to banks 44 17 317
Commercial paper - - -
Preferred stock due within one year 61 17 9
Long-term debt due within one year 169 190 192
Accounts payable 676 728 747
Customer deposits 89 83 86
Taxes accrued 181 203 221
Interest accrued 233 240 233
Vacation pay accrued 75 74 68
Miscellaneous 252 104 110
- - ----------------------------------------------------------------------------------------------------------------------------
Total 1,780 1,656 1,983
- - ----------------------------------------------------------------------------------------------------------------------------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes - - -
Deferred credits related to income taxes - - -
Accumulated deferred investment tax credits 1,111 1,161 1,180
Minority interest - - -
Prepaid capacity revenues, net 102 81 104
Disallowed Plant Vogtle capacity buyback costs 73 104 79
Miscellaneous 190 145 169
- - ----------------------------------------------------------------------------------------------------------------------------
Total 1,476 1,491 1,532
- - ----------------------------------------------------------------------------------------------------------------------------
Total Capitalization and Liabilities $ 20,092 $ 19,731 $ 19,518
============================================================================================================================
</TABLE>
II-50B
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
The Southern Company and Subsidiary Companies
===========================================================================================================
At December 31, 1986 1985
- - -----------------------------------------------------------------------------------------------------------
(Millions of Dollars)
<S> <C> <C>
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock $ 1,481 $ 1,400
Paid-in capital 2,558 2,259
Premium on preferred stock 5 7
Retained Earnings 2,089 1,777
- - -----------------------------------------------------------------------------------------------------------
Total common equity 6,133 5,443
Preferred stock 1,214 1,114
Preferred stock subject to mandatory redemption 177 194
Subsidiary obligated mandatorily redeemable preferred securities - -
Long-term debt 7,813 7,220
- - -----------------------------------------------------------------------------------------------------------
Total (excluding amount due within one year) 15,337 13,971
- - -----------------------------------------------------------------------------------------------------------
Current Liabilities:
Notes payable to banks 4 41
Commercial paper - -
Preferred stock due within one year 15 51
Long-term debt due within one year 251 303
Accounts payable 737 689
Customer deposits 82 80
Taxes accrued 259 144
Interest accrued 221 226
Vacation pay accrued 66 63
Miscellaneous 111 117
- - -----------------------------------------------------------------------------------------------------------
Total 1,746 1,714
- - -----------------------------------------------------------------------------------------------------------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes - -
Deferred credits related to income taxes - -
Accumulated deferred investment tax credits 1,208 1,114
Minority interest - -
Prepaid capacity revenues, net 101 -
Disallowed Plant Vogtle capacity buyback costs - -
Miscellaneous 91 56
- - -----------------------------------------------------------------------------------------------------------
Total 1,400 1,170
- - -----------------------------------------------------------------------------------------------------------
Total Capitalization and Liabilities $ 18,483 $ 16,855
===========================================================================================================
</TABLE>
II-50C
<PAGE>
ALABAMA POWER COMPANY
FINANCIAL SECTION
II-51
<PAGE>
Management's Report
Alabama Power Company 1995 Annual Report
The management of Alabama Power Company has prepared -- and is responsible for
- - -- the financial statements and related information included in this report.
These statements were prepared in accordance with generally accepted accounting
principles appropriate in the circumstances and necessarily include amounts that
are based on the best estimates and judgments of management. Financial
information throughout this annual report is consistent with the financial
statements.
The company maintains a system of internal accounting controls to provide
reasonable assurance that assets are safeguarded and that the books and records
reflect only authorized transactions of the company. Limitations exist in any
system of internal controls, however, based on a recognition that the cost of
the system should not exceed its benefits. The company believes its system of
internal accounting controls maintains an appropriate cost/benefit relationship.
The company's system of internal accounting controls is evaluated on an
ongoing basis by the company's internal audit staff. The company's independent
public accountants also consider certain elements of the internal control system
in order to determine their auditing procedures for the purpose of expressing an
opinion on the financial statements.
The audit committee of the board of directors, composed of directors who are
not employees, provides a broad overview of management's financial reporting and
control functions. Periodically, this committee meets with management, the
internal auditors and the independent public accountants to ensure that these
groups are fulfilling their obligations and to discuss auditing, internal
controls, and financial reporting matters. The internal auditors and independent
public accountants have access to the members of the audit committee at any
time.
Management believes that its policies and procedures provide reasonable
assurance that the company's operations are conducted according to a high
standard of business ethics.
In management's opinion, the financial statements present fairly, in all
material respects, the financial position, results of operations and cash flows
of Alabama Power Company in conformity with generally accepted accounting
principles.
/s/ Elmer B. Harris
Elmer B. Harris
President
and Chief Executive Officer
/s/ William B. Hutchins, III
William B. Hutchins, III
Executive Vice President
and Chief Financial Officer
February 21, 1996
II-52
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors
of Alabama Power Company:
We have audited the accompanying balance sheets and statements of capitalization
of Alabama Power Company (an Alabama corporation and wholly owned subsidiary of
The Southern Company) as of December 31, 1995 and 1994, and the related
statements of income, retained earnings, and cash flows for each of the three
years in the period ended December 31, 1995. These financial statements are the
responsibility of the company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements (pages II-61 through II-78)
referred to above present fairly, in all material respects, the financial
position of Alabama Power Company as of December 31, 1995 and 1994, and the
results of its operations and its cash flows for the periods stated, in
conformity with generally accepted accounting principles.
/s/ Arthur Andersen LLP
Birmingham, Alabama
February 21, 1996
II-53
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION
Alabama Power Company 1995 Annual Report
RESULTS OF OPERATIONS
Earnings
Alabama Power Company's 1995 net income after dividends on preferred stock was
$361 million, representing a $4.6 million (1.3 percent) increase from the prior
year. This improvement can be attributed to an increase in retail energy sales
of 4.7 percent from 1994 levels. This was primarily due to the extreme summer
weather during 1995, especially when compared to the mild weather of 1994. This
improvement was partially offset by a 2.6 percent increase in operating costs.
In 1994, earnings were $356 million, representing a 2.8 percent increase
from the prior year. This increase was due to lower operating expenses which
decreased 3.0 percent from the previous year. This improvement was partially
offset by reduced capacity sales to nonterritorial utilities. Net income was
also impacted by the mild weather in 1994.
The return on average common equity for 1995 was 13.61 percent compared to
13.86 percent in 1994, and 13.94 percent in 1993.
Revenues
Total revenues for 1995 were $3.0 billion, reflecting a 3.1 percent increase
from 1994. The following table summarizes the principal factors that affected
operating revenues for the past three years:
Increase (Decrease)
From Prior Year
----------------------------------------
1995 1994 1993
------------- ------------ -------------
(in thousands)
Retail --
Change in
base rates $ 990 $ -- $ --
Unbilled
adjustment -- 28,000 --
Sales growth 18,174 45,304 24,960
Weather 54,888 (39,964) 58,536
Fuel cost recovery
and other 35,235 (84,344) 96,437
---------------------------------------------------------------
Total retail 109,287 (51,004) 179,933
---------------------------------------------------------------
Sales for Resale --
Non-affiliates 15,380 (9,345) (43,686)
Affiliates (37,032) (17,213) 23,887
---------------------------------------------------------------
Total sales for resale (21,652) (26,558) (19,799)
Other operating
revenues 1,997 5,095 635
---------------------------------------------------------------
Total operating
revenues $89,632 $(72,467) $160,769
---------------------------------------------------------------
Percent change 3.1% (2.4)% 5.6%
---------------------------------------------------------------
Retail revenues of $2.5 billion in 1995 increased $109 million (4.6 percent)
from the prior year, compared with a decrease of $51 million (2.1 percent) in
1994. The hot weather during the summer of 1995 and higher fuel cost recovery
were the primary reasons for the increase in retail revenues over 1994. The mild
weather during 1994 and lower fuel cost recovery contributed to the decrease in
retail revenues from 1993. Fuel revenues, which increased in 1995, generally
represent the direct recovery of fuel expense, including the fuel component of
purchased energy, and therefore have no effect on net income.
Revenues from sales to utilities outside the service area under
long-term contracts consist of capacity and energy components. Capacity revenues
reflect the recovery of fixed costs and a return on investment under the
II-54
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Alabama Power Company 1995 Annual Report
contracts. Energy is generally sold at variable cost. These capacity and energy
components, as well as the components of the sales to affiliated companies,
were:
1995 1994 1993
-------------------------------------------
(in thousands)
Capacity $158,825 $165,063 $187,062
Energy 209,376 222,579 233,253
----------------------------------------------------------
Total $368,201 $387,642 $420,315
----------------------------------------------------------
Capacity revenues from non-affiliates remained relatively constant in 1995
and 1994. Capacity revenues from sales to affiliates decreased $22 million in
1994. Sales to affiliated companies within the Southern electric system will
vary from year to year depending on demand, the availability, and the variable
production cost of generating resources at each company.
Kilowatt-hour (KWH) sales for 1995 and the percent change by year were as
follows:
KWH Percent Change
-------------------------------------------
1995 1995 1994 1993
-------------------------------------------
(millions)
Residential 14,383 9.1% (1.7)% 9.2%
Commercial 10,043 4.1 3.4 6.4
Industrial 19,863 2.0 3.2 1.8
Other 187 0.5 1.1 2.8
----------
Total retail 44,476 4.7 3.3 5.1
Sales for resale -
Non-affiliates 8,046 18.8 (5.2) (14.8)
Affiliates 6,705 (20.5) 4.3 12.1
----------
Total 59,227 2.6% 2.4% 3.0%
- - -----------------------------------------------------------------
The rate of increase in 1995 retail energy sales was fostered by the impact
of weather. Residential energy sales surged upward as a result of
hotter-than-normal summer weather in 1995, compared with the mild summer of
1994. The gains in commercial and industrial sales reflect the strength of
business and economic conditions in the company's service area.
Expenses
Total operating expenses of $2.4 billion for 1995 were up $60 million or 2.6
percent compared with 1994. The major components of this increase include $27
million in purchased power, $43 million in other operation expenses, $11 million
in depreciation and amortization, and $7 million in income taxes offset by
decreases in fuel costs and maintenance expenses of $10 million and $19 million,
respectively.
Total operating expenses of $2.3 billion for 1994 were down 3.0 percent
compared with the prior year. The decrease was mainly due to less coal-fired
generation and a lower average cost of fuel consumed. Coal-fired generation
decreased because it was displaced with lower cost nuclear and hydro generation.
Fuel costs constitute the single largest expense for the company. The mix of
fuel sources for generation of electricity is determined primarily by system
load, the unit cost of fuel consumed, and the availability of hydro and nuclear
generating units. The amount and sources of generation and the average cost of
fuel per net kilowatt-hour generated were as follows:
--------------------------
1995 1994 1993
-------------------------
Total generation
(billions of kilowatt-hours) 58 57 55
Sources of generation
(percent) --
Coal 73 68 70
Nuclear 19 23 22
Hydro 8 9 8
Average cost of fuel per net
kilowatt-hour generated
(cents) --
Coal 1.71 1.92 2.11
Nuclear 0.50 0.49 0.51
Total 1.48 1.56 1.73
- - --------------------------------------------------------------
Note: Oil & Gas comprise less than 0.5% of generation.
Fuel expense decreased in 1995 by $10 million or 1.3 percent. This decrease
resulted from lower average cost of fuel consumed. Fuel expense decreased in
1994 by $75 million (8.6 percent) from the previous year. This decrease is
attributable to the increase in availability of nuclear and hydro generation and
a decrease in the cost of fuel.
The increase in purchased power is primarily attributable to the
exceptionally hot summer weather. Purchased power consists primarily of
purchases from the affiliates of the Southern electric system. Purchased power
II-55
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Alabama Power Company 1995 Annual Report
transactions among the company and its affiliates will vary from period to
period depending on demand, the availability, and the variable production cost
of generating resources at each company. KWH purchases from affiliates increased
18 percent from the prior year.
Other operation expenses increased 9.4 percent in 1995 following a 2.5
percent decrease in 1994. This increase over 1994 is primarily attributable to
the 1995 expenses not reflecting the positive impact of the amortization of the
Gulf States Utilities settlement which expired in 1994.
The decrease in maintenance expenses for 1995 reflects the establishment in
September 1994 of a Natural Disaster Reserve. This also caused the increase in
1994 maintenance expenses over 1993. See Note 1 to the financial statements
under "Natural Disaster Reserve" for additional information.
Depreciation and amortization expense increased 3.6 percent in 1995. This
increase reflects additions to utility plant. The amount for 1994 was virtually
unchanged from the previous year because of lower average depreciation rates
effective January 1994 and offsetting growth in depreciable plant in service.
Income tax expense increased 3.0 percent and 8.2 percent in 1995 and 1994,
respectively. These increases are primarily attributable to higher taxable
income.
The company contributed $11.5 million to the Alabama Power Foundation, Inc.
in 1995, which represents a decrease of $2.0 million from the previous year. The
Foundation makes distributions to qualified entities which are organized
exclusively for charitable, educational, literary, and scientific purposes.
Total net interest charges and preferred stock dividends rose in 1995 to
$265 million, an increase of 12.2 percent. This increase results from (i)
interest on interim obligations which rose due to higher average interest rates
on an increased average amount of short-term debt outstanding and (ii)
amortization of debt discount, premium, and expense, net pursuant to an APSC
order. See Note 3 to the financial statements under "Retail Rate Adjustment
Procedures" for additional details. The decline in net interest charges in 1994
by $23 million (9.0 percent) reflects the benefits from refinancing.
Effects of Inflation
The company is subject to rate regulation and income tax laws that are based on
the recovery of historical costs. Therefore, inflation creates an economic loss
because the company is recovering its costs of investments in dollars that have
less purchasing power. While the inflation rate has been relatively low in
recent years, it continues to have an adverse effect on the company because of
the large investment in long-lived utility plant. Conventional accounting for
historical cost does not recognize this economic loss nor the partially
offsetting gain that arises through financing facilities with fixed-money
obligations, such as long-term debt and preferred stock. Any recognition of
inflation by regulatory authorities is reflected in the rate of return allowed.
Future Earnings Potential
The results of operations for the past three years are not necessarily
indicative of future earnings potential. The level of future earnings depends on
numerous factors ranging from energy sales growth to a less regulated more
competitive environment.
Future earnings in the near term will depend upon growth in electric sales,
which are subject to a number of factors. Traditionally, these factors have
included weather, competition, changes in contracts with neighboring utilities,
energy conservation practiced by customers, the elasticity of demand, and the
rate of economic growth in the company's service area. However, the Energy
Policy Act of 1992 (Energy Act) is beginning to have a dramatic effect on the
future of the electric utility industry. The Energy Act promotes energy
efficiency, alternative fuel use, and increased competition for electric
utilities. The company is positioning the business to meet the challenge of this
major change in the traditional practice of selling electricity. The Energy Act
allows independent power producers (IPPs) to access a utility's transmission
network in order to sell electricity to other utilities. This enhances the
incentive for IPPs to build cogeneration plants for a utility's large industrial
and commercial customers and sell excess energy generation to other utilities.
Also, electricity sales for resale rates are being driven down by wholesale
transmission access and numerous potential new energy suppliers, including power
II-56
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Alabama Power Company 1995 Annual Report
marketers and brokers. The company is aggressively working to maintain and
expand its share of wholesale sales in the Southeastern power markets.
Although the Energy Act does not require transmission access to retail
customers, retail wheeling initiatives are rapidly evolving and becoming very
prominent issues in several states. New federal legislation is being discussed,
and legislation allowing customer choice has already been introduced in Florida
and Georgia. In order to address these initiatives, numerous questions must be
resolved, with the most complex ones relating to transmission pricing and
recovery of stranded investments. As the initiatives become a reality, the
structure of the utility industry could radically change. Therefore, unless the
company remains a low-cost producer and provides quality service, the company's
retail energy sales growth could be limited, and this could significantly erode
earnings. Conversely, being the low-cost producer could provide significant
opportunities to increase market share and profitability by seeking new markets
that evolve with the changing regulation.
The addition of four combustion turbine generating units in 1996 will
increase related operation and maintenance expenses and depreciation expenses.
These additions are to ensure reliable service to its customers during critical
peak times.
Rates to retail customers served by the company are regulated by the Alabama
Public Service Commission (APSC). Rates for the company can be adjusted
periodically within certain limitations based on earned retail rate of return
compared with an allowed return. In June 1995, the APSC issued an order granting
the company's request for gradual adjustments to move toward parity among
customer classes. This order also calls for a moratorium on any periodic retail
rate increases (but not decreases) until 2001.
In December 1995, the APSC issued an order authorizing the company to reduce
balance sheet items
- - -- such as plant and deferred charges -- at any time the company's actual base
rate revenues exceed the budgeted revenues. See Note 3 to the financial
statements for information about this and other regulatory matters.
The staff of the Securities and Exchange Commission has questioned certain
of the current accounting practices of the electric utility industry --
including the company -- regarding the recognition, measurement, and
classification of decommissioning costs for nuclear generating facilities in the
financial statements. In response to these questions, the Financial Accounting
Standards Board (FASB) has decided to review the accounting for liabilities
related to closure and removal of long-lived assets, including nuclear
decommissioning. If the FASB issues new accounting rules, the estimated costs of
closing and removing the company's nuclear and other facilities may be required
to be recorded as liabilities in the Balance Sheets. Also, the annual provisions
for such costs could increase. Because of the company's current ability to
recover closure and removal costs through rates, these changes should not have a
significant adverse effect on results of operations. See Note 1 to the financial
statements under "Depreciation and Nuclear Decommissioning" for additional
information.
Compliance costs related to the Clean Air Act Amendments of 1990 (Clean Air
Act) could affect earnings if such costs are not fully recovered. The Clean Air
Act and other important environmental items are discussed later under
"Environmental Matters."
The company is subject to the provisions of FASB Statement No. 71,
Accounting for the Effects of Certain Types of Regulation. In the event that a
portion of the company's operations is no longer subject to these provisions,
the company would be required to write off related regulatory assets and
liabilities, and determine if any other assets have been impaired. See Note 1 to
the financial statements under "Regulatory Assets and Liabilities" for
additional information.
New Accounting Standards
The FASB has issued Statement No. 121, Accounting for the Impairment of
Long-Lived Assets and Long-Lived Assets to be Disposed of. This statement
requires that long-lived assets be reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount for an asset may not
be recoverable. This statement also imposes stricter criteria for regulatory
assets by requiring that such assets be probable of future recovery at each
balance sheet date. The company adopted the new rules January 1, 1996, with no
material effect on the financial statements. However, this conclusion may change
in the future as competitive factors influence wholesale and retail pricing in
the utility industry.
II-57
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Alabama Power Company 1995 Annual Report
FINANCIAL CONDITION
Overview
The company's financial condition remained stable in 1995. This stability is the
continuation over recent years of growth in energy sales and cost control
measures combined with a significant lowering of the cost of capital, achieved
through the refinancing and/or redemption of higher-cost long-term debt and
preferred stock.
The company had gross property additions of $552 million in 1995. The
majority of funds needed for gross property additions for the last several years
have been provided from operating activities, principally from earnings and
non-cash charges to income such as depreciation and deferred income taxes. The
Statements of Cash Flows provide additional details.
Capital Structure
The company's ratio of common equity to total capitalization -- including
short-term debt -- was 45.0 percent in 1995, compared with 45.9 percent in 1994,
and 46.5 percent in 1993.
In 1995, the company issued through public authorities, $131.5 million of
pollution control revenue refunding bonds. Composite financing rates as of
year-end for 1993 through 1995 were as follows:
1995 1994 1993
--------------------------------
Composite interest rate on
long-term debt 7.02% 7.39% 7.35%
Composite dividend rate on
preferred stock 6.04% 6.23% 5.80%
----------------------------------------------------------------
The company's current securities ratings are as follows:
Duff & Standard
Phelps Moody's & Poor's
----------------------------------
First Mortgage Bonds A+ A1 A+
Preferred Stock A a2 A
------------------------------------------------------------
Capital Requirements
Capital expenditures are estimated to be $491 million for 1996, $446 million for
1997, and $479 million for 1998. The total is $1.4 billion for the three years.
Actual capital costs may vary from this estimate because of factors such as
changes in business conditions; revised load growth projections; changes in
environmental regulations; changes in the existing nuclear plant to meet new
regulatory requirements; increasing cost of labor, equipment, and materials; and
cost of capital. In addition, there can be no assurance that costs related to
capital expenditures will be fully recovered.
The company does not have any baseload generating plants under construction,
and current energy demand forecasts do not require any additional baseload
generating units until well into the future. However, the addition of combustion
turbine peaking units of approximately 320 megawatts of capacity is planned in
1996 to meet increased peak-hour demands. In addition, significant construction
of transmission and distribution facilities and upgrading of generating plants
will continue.
Other Capital Requirements
In addition to the funds needed for the capital budget, approximately $110
million will be required by the end of 1998 for maturities of first mortgage
bonds. Also, the company will continue to retire higher-cost debt and preferred
stock and replace these obligations with lower-cost capital if market conditions
permit.
Environmental Matters
In November 1990, the Clean Air Act was signed into law. Title IV of the Clean
Air Act -- the acid rain compliance provision of the law -- has significantly
impacted the Southern electric system. Specific reductions in sulfur dioxide and
nitrogen oxide emissions from fossil-fired generating plants are required in two
phases. Phase I compliance began in 1995 and affected 28 generating units in the
Southern electric system. As a result of The Southern Company's compliance
strategy, an additional 22 generating units were brought into compliance with
Phase I requirements. Phase II compliance is required in 2000, and all
fossil-fired generating plants will be affected.
II-58
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Alabama Power Company 1995 Annual Report
In 1995, the Environmental Protection Agency (EPA) began issuing annual
sulfur dioxide emission allowances through the allowance trading program. An
emission allowance is the authority to emit one ton of sulfur dioxide during a
calendar year. The method for issuing allowances is based on the fossil fuel
consumed from 1985 through 1987 for each affected generating unit. Emission
allowances are transferable and can be bought, sold, or banked and used in the
future.
The sulfur dioxide emission allowance program is expected to minimize the
cost of compliance. The Southern Company's sulfur dioxide compliance strategy is
designed to use allowances as a compliance option.
The Southern Company achieved Phase I sulfur dioxide compliance at the
affected plants by switching to low-sulfur coal, which required some equipment
upgrades. This compliance strategy resulted in unused emission allowances being
banked for later use. Compliance with nitrogen oxide emission limits was
achieved by the installation of new control equipment at 22 of the original 28
affected generating units. Construction expenditures for Phase I compliance
totaled approximately $320 million through 1995 for The Southern Company, of
which the company's portion was approximately $32 million.
For Phase II sulfur dioxide compliance, The Southern Company could use
emission allowances banked during Phase I, increase fuel switching, install flue
gas desulfurization equipment at selected plants, and/or purchase more
allowances, depending on the price and availability of allowances. Also, in
Phase II, equipment to control nitrogen oxide emissions will be installed on
additional system fossil-fired plants as required to meet Phase II limits.
Therefore, during the period 1996 to 2000, current compliance strategy could
require total estimated construction expenditures of approximately $150 million
for The Southern Company, of which the company's portion is approximately $96
million. However, the full impact of Phase II compliance cannot now be
determined with certainty, pending the continuing development of a market for
emission allowances, the completion of EPA regulations, and the possibility of
new emission reduction technologies.
An average increase of up to 1 percent in annual revenue requirements from
customers could be necessary to fully recover the company's cost of compliance
for both Phase I and Phase II of Title IV of the Clean Air Act. Compliance costs
include construction expenditures, increased costs for switching to low-sulfur
coal, and costs related to emission allowances.
A significant portion of costs related to the acid rain provision of the
Clean Air Act is expected to be recovered through existing ratemaking
provisions. However, there can be no assurance that all Clean Air Act costs will
be recovered.
Title III of the Clean Air Act requires a multi-year EPA study of power plant
emissions of hazardous air pollutants. The EPA is scheduled to submit a report
to Congress on the results of this study during 1996. The report will include a
decision on whether additional regulatory control of these substances is
warranted. Compliance with any new control standards could result in significant
additional costs. The impact of new standards -- if any -- will depend on the
development and implementation of applicable regulations.
The EPA is evaluating the need to revise the ambient air quality standards
for particulate matter and ozone. The impact of any new standard will depend on
the level chosen for the standard and cannot be determined at this time.
In 1996, the EPA may issue revised rules on air quality control regulations
related to stack height requirements of the Clean Air Act. The full impact of
the final rules cannot be determined at this time, pending their development and
implementation.
In 1993, the EPA issued a ruling confirming the non-hazardous status of coal
ash. However, the EPA has until 1998 to classify co-managed utility wastes --
coal ash and other utility wastes -- as either non-hazardous or hazardous. If
the EPA classifies the co-managed wastes as hazardous, then substantial
II-59
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Alabama Power Company 1995 Annual Report
additional costs for the management of such wastes may be required. The full
impact of any change in the regulatory status will depend on the subsequent
development of co-managed waste requirements.
The company must comply with other environmental laws and regulations that
cover the handling and disposal of hazardous waste. Under these various laws and
regulations, the company could incur costs to clean up properties. The company
conducts studies to determine the extent of any required cleanup costs and has
recognized in the financial statements costs to clean up known sites.
Several major pieces of environmental legislation are being considered for
reauthorization or amendment by Congress. These include: the Clean Air Act; the
Clean Water Act; the Comprehensive Environmental Response, Compensation, and
Liability Act; the Resource Conservation and Recovery Act; the Toxic Substances
Control Act; and the Endangered Species Act. Changes to these laws could affect
many areas of The Southern Company's operations. The full impact of these
requirements cannot be determined at this time, pending the development and
implementation of applicable regulations.
Compliance with possible additional legislation related to global climate
change, electromagnetic fields, and other environmental and health concerns
could significantly affect the Southern electric system. The impact of new
legislation -- if any -- will depend on the subsequent development and
implementation of applicable regulations. In addition, the potential exists for
liability as the result of lawsuits alleging damages caused by electromagnetic
fields.
Sources of Capital
It is anticipated that the funds required will be derived from sources in form
and quantity similar to those used in the past. To issue additional first
mortgage bonds and preferred stock, the company must comply with certain
earnings coverage requirements designated in its mortgage indenture and
corporate charter. The company's coverages are at a level that would permit any
necessary amount of security sales at current interest and dividend rates.
As required by the Nuclear Regulatory Commission and as ordered by the APSC,
the company has established external trust funds for nuclear decommissioning
costs. In 1994, the company also established an external trust fund for
postretirement benefits as ordered by the APSC. The cumulative effect of funding
these items over a long period will diminish internally funded capital and may
require capital from other sources. For additional information concerning
nuclear decommissioning costs, see Note 1 to the financial statements under
"Depreciation and Nuclear Decommissioning."
II-60
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF INCOME
For the Years Ended December 31, 1995, 1994, and 1993
Alabama Power Company 1995 Annual Report
- - --------------------------------------------------------------------------------------------------------------------------------
1995 1994 1993
- - --------------------------------------------------------------------------------------------------------------------------------
(in thousands)
<S> <C> <C> <C>
Operating Revenues (Notes 1, 3 and 7):
Revenues $ 2,897,044 $ 2,770,380 $ 2,825,634
Revenues from affiliates 127,730 164,762 181,975
- - --------------------------------------------------------------------------------------------------------------------------------
Total operating revenues 3,024,774 2,935,142 3,007,609
- - --------------------------------------------------------------------------------------------------------------------------------
Operating Expenses:
Operation --
Fuel 791,819 801,948 877,099
Purchased power from non-affiliates 30,065 15,158 15,230
Purchased power from affiliates 112,826 100,888 120,330
Other 501,876 458,917 470,815
Maintenance 243,218 262,102 252,506
Depreciation and amortization 303,050 292,420 290,310
Taxes other than income taxes 185,620 183,425 178,997
Federal and state income taxes (Note 8) 230,982 224,280 207,210
- - --------------------------------------------------------------------------------------------------------------------------------
Total operating expenses 2,399,456 2,339,138 2,412,497
- - --------------------------------------------------------------------------------------------------------------------------------
Operating Income 625,318 596,004 595,112
Other Income (Expense):
Allowance for equity funds used during construction (Note 1) 1,649 3,239 3,260
Income from subsidiary (Note 6) 4,051 3,588 4,127
Charitable foundation (11,542) (13,500) (3,000)
Interest income 13,768 16,944 20,775
Other, net (21,536) (30,569) (24,420)
Income taxes applicable to other income 14,142 16,834 10,239
- - --------------------------------------------------------------------------------------------------------------------------------
Income Before Interest Charges 625,850 592,540 606,093
- - --------------------------------------------------------------------------------------------------------------------------------
Interest Charges:
Interest on long-term debt 180,714 178,045 184,861
Allowance for debt funds used during construction (Note 1) (7,067) (3,548) (2,992)
Interest on interim obligations 16,917 5,939 3,760
Amortization of debt discount, premium, and expense, net 20,259 9,623 8,937
Other interest charges 27,064 19,908 35,474
- - --------------------------------------------------------------------------------------------------------------------------------
Net interest charges 237,887 209,967 230,040
- - --------------------------------------------------------------------------------------------------------------------------------
Net Income 387,963 382,573 376,053
Dividends on Preferred Stock 27,069 26,235 29,559
- - --------------------------------------------------------------------------------------------------------------------------------
Net Income After Dividends on Preferred Stock $ 360,894 $ 356,338 $ 346,494
================================================================================================================================
The accompanying notes are an integral part of these statements.
</TABLE>
II-61
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 1995, 1994, and 1993
Alabama Power Company 1995 Annual Report
================================================================================================================================
1995 1994 1993
- - --------------------------------------------------------------------------------------------------------------------------------
(in thousands)
<S> <C> <C> <C>
Operating Activities:
Net income $ 387,963 $ 382,573 $ 376,053
Adjustments to reconcile net income to net
cash provided by operating activities --
Depreciation and amortization 371,382 359,791 356,499
Deferred income taxes and investment tax credits 32,627 (32,613) 32,994
Allowance for equity funds used during construction (1,649) (3,239) (3,260)
Other, net 33,244 28,656 36,493
Changes in certain current assets and liabilities --
Receivables, net (54,209) 19,390 19,215
Inventories 18,425 (38,946) 51,630
Payables (63,656) (21,240) 31,544
Taxes accrued 551 6,856 (9,959)
Energy cost recovery, retail 1,177 16,907 (56,128)
Other (15,895) (14,235) (21,110)
- - --------------------------------------------------------------------------------------------------------------------------------
Net cash provided from operating activities 709,960 703,900 813,971
- - --------------------------------------------------------------------------------------------------------------------------------
Investing Activities:
Gross property additions (551,781) (536,785) (435,843)
Other (53,321) (26,632) (741)
- - --------------------------------------------------------------------------------------------------------------------------------
Net cash used for investing activities (605,102) (563,417) (436,584)
- - --------------------------------------------------------------------------------------------------------------------------------
Financing Activities:
Proceeds:
Preferred stock - - 158,000
First mortgage bonds - 150,000 860,000
Other long-term debt 131,500 208,720 180,314
Retirements:
Preferred stock - - (207,000)
First mortgage bonds - (20,387) (699,788)
Other long-term debt (132,291) (305,380) (181,329)
Interim obligations, net 210,134 139,882 (156,917)
Payment of preferred stock dividends (27,118) (25,431) (32,099)
Payment of common stock dividends (285,000) (268,000) (252,900)
Miscellaneous (4,143) (8,444) (56,064)
- - --------------------------------------------------------------------------------------------------------------------------------
Net cash used for financing activities (106,918) (129,040) (387,783)
- - --------------------------------------------------------------------------------------------------------------------------------
Net Change in Cash (2,060) 11,443 (10,396)
Cash at Beginning of Year 14,676 3,233 13,629
- - --------------------------------------------------------------------------------------------------------------------------------
Cash at End of Year $ 12,616 $ 14,676 $ 3,233
================================================================================================================================
Supplemental Cash Flow Information:
Cash paid during the year for --
Interest (net of amount capitalized) 189,268 $ 183,445 $ 176,805
Income taxes 172,777 231,831 175,591
- - --------------------------------------------------------------------------------------------------------------------------------
( ) Denotes use of cash.
The accompanying notes are an integral part of these statements.
</TABLE>
II-62
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
At December 31, 1995 and 1994
Alabama Power Company 1995 Annual Report
================================================================================================================================
ASSETS 1995 1994
- - --------------------------------------------------------------------------------------------------------------------------------
(in thousands)
Utility Plant:
<S> <C> <C>
Plant in service, at original cost (Note 1) $10,430,792 $10,052,772
Less accumulated provision for depreciation 3,838,093 3,598,604
- - --------------------------------------------------------------------------------------------------------------------------------
6,592,699 6,454,168
Nuclear fuel, at amortized cost 100,537 101,630
Construction work in progress 362,768 317,779
- - --------------------------------------------------------------------------------------------------------------------------------
Total 7,056,004 6,873,577
- - --------------------------------------------------------------------------------------------------------------------------------
Other Property and Investments:
Southern Electric Generating Company, at equity (Note 6) 27,232 26,985
Nuclear decommissioning trusts (Note 1) 108,368 71,014
Miscellaneous 19,156 16,970
- - --------------------------------------------------------------------------------------------------------------------------------
Total 154,756 114,969
- - --------------------------------------------------------------------------------------------------------------------------------
Current Assets:
Cash 12,616 14,676
Receivables-
Customer accounts receivable 355,833 308,561
Other accounts and notes receivable 28,082 22,547
Affiliated companies 41,819 29,303
Accumulated provision for uncollectible accounts (1,212) (2,297)
Refundable income taxes 2,635 16,011
Fossil fuel stock, at average cost 106,627 119,555
Materials and supplies, at average cost 179,103 184,600
Prepayments-
Income taxes - 19,196
Other 116,331 84,354
Vacation pay deferred 29,458 20,442
- - --------------------------------------------------------------------------------------------------------------------------------
Total 871,292 816,948
- - --------------------------------------------------------------------------------------------------------------------------------
Deferred Charges:
Deferred charges related to income taxes (Note 8) 436,837 451,886
Debt expense, being amortized 7,648 7,370
Premium on reacquired debt, being amortized 89,967 101,851
Uranium enrichment decontamination and decommissioning fund (Note 1) 40,282 42,996
Miscellaneous 87,574 49,620
- - --------------------------------------------------------------------------------------------------------------------------------
Total 662,308 653,723
- - --------------------------------------------------------------------------------------------------------------------------------
Total Assets $8,744,360 $8,459,217
================================================================================================================================
The accompanying notes are an integral part of these balance sheets.
</TABLE>
II-63
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
At December 31, 1995 and 1994
Alabama Power Company 1995 Annual Report
================================================================================================================================
CAPITALIZATION AND LIABILITIES 1995 1994
- - --------------------------------------------------------------------------------------------------------------------------------
(in thousands)
Capitalization (See accompanying statements):
<S> <C> <C>
Common stock equity $2,690,374 $2,614,405
Preferred stock 440,400 440,400
Long-term debt 2,374,948 2,455,013
- - --------------------------------------------------------------------------------------------------------------------------------
Total 5,505,722 5,509,818
- - --------------------------------------------------------------------------------------------------------------------------------
Current Liabilities:
Long-term debt due within one year (Note 10) 84,682 796
Commercial paper 390,016 179,882
Accounts payable-
Affiliated companies 76,326 60,334
Other 182,401 258,657
Customer deposits 30,353 30,245
Taxes accrued-
Federal and state income 13,599 6,848
Other 18,158 15,589
Interest accrued 53,527 52,516
Vacation pay accrued 29,458 20,442
Miscellaneous 70,543 57,047
- - --------------------------------------------------------------------------------------------------------------------------------
Total 949,063 682,356
- - --------------------------------------------------------------------------------------------------------------------------------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes (Note 8) 1,191,591 1,181,342
Accumulated deferred investment tax credits 305,372 317,018
Prepaid capacity revenues, net (Note 7) 131,186 138,421
Uranium enrichment decontamination and decommissioning fund (Note 1) 36,620 39,413
Deferred credits related to income taxes (Note 8) 386,038 405,256
Natural disaster reserve (Note 1) 17,959 28,750
Miscellaneous 220,809 156,843
- - --------------------------------------------------------------------------------------------------------------------------------
Total 2,289,575 2,267,043
- - --------------------------------------------------------------------------------------------------------------------------------
Commitments and Contingent Matters (Notes 1, 3, 4, 5, 6, 7, and 11)
Total Capitalization and Liabilities $8,744,360 $8,459,217
================================================================================================================================
The accompanying notes are an integral part of these balance sheets.
</TABLE>
II-64
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CAPITALIZATION
At December 31, 1995 and 1994
Alabama Power Company 1995 Annual Report
================================================================================================================================
1995 1994 1995 1994
- - --------------------------------------------------------------------------------------------------------------------------------
(in thousands) (percent of total)
<S> <C> <C>
Common Stock Equity:
Common stock, par value $40 per share--
Authorized -- 6,000,000 shares
Outstanding -- 5,608,955 shares in
1995 and 1994 $ 224,358 $ 224,358
Paid-in capital 1,304,645 1,304,645
Premium on preferred stock 146 146
Retained earnings (Note 12) 1,161,225 1,085,256
- - --------------------------------------------------------------------------------------------------------------------------------
Total common stock equity 2,690,374 2,614,405 48.9% 47.4%
- - --------------------------------------------------------------------------------------------------------------------------------
Cumulative Preferred Stock:
$1 par value--
Authorized -- 27,500,000 shares
Outstanding -- 12,020,200 shares
$25 stated capital --
6.40% 50,000 50,000
6.80% 38,000 38,000
7.60% 150,000 150,000
Adjustable rate
4.82% - at January 1, 1996 50,000 50,000
$100 stated capital --
Auction rate - at January 1, 1996: 4.43% 50,000 50,000
$100,000 stated capital --
Auction rate - at January 1, 1996: 4.53% 20,000 20,000
$100 par value --
Authorized -- 3,850,000 shares
Outstanding -- 824,000 shares
4.20% to 4.52% 41,400 41,400
4.60% to 4.92% 29,000 29,000
5.96% to 6.88% 12,000 12,000
- - --------------------------------------------------------------------------------------------------------------------------------
Total (annual dividend requirement -- $26,599,000) 440,400 440,400 8.0 8.0
- - --------------------------------------------------------------------------------------------------------------------------------
Long-Term Debt:
First Mortgage bonds --
Maturity Interest Rates
March 1, 1996 4 1/2% 60,000 60,000
February 1, 1998 5 1/2% 50,000 50,000
August 1, 1999 6 3/8% 170,000 170,000
March 1, 2000 6% 100,000 100,000
2003 through 2007 6 3/4% to 7 1/4% 575,000 575,000
2021 through 2024 7.30% to 9 1/4% 1,044,856 1,044,856
- - --------------------------------------------------------------------------------------------------------------------------------
Total first mortgage bonds 1,999,856 1,999,856
Pollution control obligations 476,140 476,140
Other long-term debt 8,963 9,754
Unamortized debt premium (discount), net (25,329) (29,941)
- - --------------------------------------------------------------------------------------------------------------------------------
Total long-term debt (annual interest
requirement -- $174,568,000) 2,459,630 2,455,809
Less amount due within one year (Note 10) 84,682 796
- - --------------------------------------------------------------------------------------------------------------------------------
Long-term debt excluding amount due within one year 2,374,948 2,455,013 43.1 44.6
- - --------------------------------------------------------------------------------------------------------------------------------
Total Capitalization $ 5,505,722 $ 5,509,818 100.0% 100.0%
================================================================================================================================
The accompanying notes are an integral part of these statements.
</TABLE>
II-65
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF RETAINED EARNINGS
For the Years Ended December 31, 1995, 1994, and 1993
Alabama Power Company 1995 Annual Report
================================================================================================================================
1995 1994 1993
- - --------------------------------------------------------------------------------------------------------------------------------
(in thousands)
<S> <C> <C> <C>
Balance at Beginning of Year $ 1,085,256 $ 997,199 $ 914,148
Net income after dividends on preferred stock 360,894 356,338 346,494
Cash dividends on common stock (285,000) (268,000) (252,900)
Preferred stock transactions, net - (118) (10,587)
Other adjustments to retained earnings 75 (163) 44
- - --------------------------------------------------------------------------------------------------------------------------------
Balance at End of Year (Note 12) $ 1,161,225 $ 1,085,256 $ 997,199
================================================================================================================================
The accompanying notes are an integral part of these statements.
</TABLE>
II-66
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Alabama Power Company 1995 Annual Report
1. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
General
Alabama Power Company (the company) is a wholly owned subsidiary of The Southern
Company, which is the parent company of five operating companies, a system
service company, Southern Communications Services (Southern Communications),
Southern Electric International (Southern Electric), Southern Nuclear Operating
Company (Southern Nuclear), The Southern Development and Investment Group
(Southern Development), and other direct and indirect subsidiaries. The
operating companies (Alabama Power Company, Georgia Power Company, Gulf Power
Company, Mississippi Power Company, and Savannah Electric and Power Company)
provide electric service in four Southeastern states. Contracts among the
companies -- dealing with jointly-owned generating facilities, interconnecting
transmission lines, and the exchange of electric power -- are regulated by the
Federal Energy Regulatory Commission (FERC) or the Securities and Exchange
Commission (SEC). The system service company provides, at cost, specialized
services to The Southern Company and subsidiary companies. Southern
Communications provides digital wireless communications services to the
operating companies and also markets these services to the public within the
Southeast. Southern Electric designs, builds, owns and operates power production
and delivery facilities and provides a broad range of technical services to
industrial companies and utilities in the United States and a number of
international markets. Southern Nuclear provides services to The Southern
Company's nuclear power plants. Southern Development develops new business
opportunities related to energy products and services.
The Southern Company is registered as a holding company under the Public
Utility Holding Company Act of 1935 (PUHCA). Both The Southern Company and its
subsidiaries are subject to the regulatory provisions of the PUHCA. The company
is also subject to regulation by the FERC and the Alabama Public Service
Commission (APSC). The company follows generally accepted accounting principles
and complies with the accounting policies and practices prescribed by the
respective regulatory commissions. The preparation of financial statements in
conformity with generally accepted accounting principles requires the use of
estimates, and the actual results may differ from those estimates.
Regulatory Assets and Liabilities
The company is subject to the provisions of Financial Accounting Standards Board
(FASB) Statement No. 71, Accounting for the Effects of Certain Types of
Regulation. Regulatory assets represent probable future revenues to the company
associated with certain costs that are expected to be recovered from customers
through the ratemaking process. Regulatory liabilities represent probable future
reductions in revenues associated with amounts that are to be credited to
customers through the ratemaking process. Regulatory assets and (liabilities)
reflected in the Balance Sheets at December 31 relate to:
1995 1994
-----------------------
(in thousands)
Deferred income taxes $436,837 $451,886
Premium on reacquired debt 89,967 101,620
Department of Energy assessments 40,282 42,996
Vacation pay 29,458 20,442
Work force reduction costs 48,402 3,664
Deferred income tax credits (386,038) (405,256)
Natural disaster reserve (17,959) (28,750)
Other, net 39,172 45,956
================================================================
Total $280,121 $232,558
================================================================
In the event that a portion of the company's operations is no longer subject
to the provisions of Statement No. 71, the company would be required to write
off related regulatory assets and liabilities. In addition, the company would be
required to determine any impairment to other assets, including plant, and write
down the assets, if impaired, to their fair value.
Revenues and Fuel Costs
The company accrues revenues for services rendered but unbilled at the end of
each fiscal period. Fuel costs are expensed as the fuel is used. The company's
electric rates include provisions to adjust billings for fluctuations in fuel
and the energy component of purchased power costs. Revenues are adjusted for
differences between recoverable fuel costs and amounts actually recovered in
current rates.
II-67
<PAGE>
NOTES (continued)
Alabama Power Company 1995 Annual Report
The company has a diversified base of customers. No single customer or
industry comprises 10 percent or more of revenues. In 1995, uncollectible
accounts continued to average less than 1 percent of revenues.
Fuel expense includes the amortization of the cost of nuclear fuel and a
charge, based on nuclear generation, for the permanent disposal of spent nuclear
fuel. Total charges for nuclear fuel included in fuel expense amounted to $54
million in 1995, $65 million in 1994, and $62 million in 1993. The company has a
contract with the U.S. Department of Energy (DOE) that provides for the
permanent disposal of spent nuclear fuel. Although disposal was scheduled to
begin in 1998, the actual year this service will begin is uncertain. Sufficient
storage capacity currently is available to permit operation into 2012 and 2014
at Plant Farley units 1 and 2, respectively.
Also, the Energy Policy Act of 1992 required the establishment in 1993 of a
Uranium Enrichment Decontamination and Decommissioning Fund, which is to be
funded in part by a special assessment on utilities with nuclear plants. This
assessment will be paid over a 15- year period, which began in 1993. This fund
will be used by the DOE for the decontamination and decommissioning of its
nuclear fuel enrichment facilities. The law provides that utilities will recover
these payments in the same manner as any other fuel expense. The company
estimates its remaining liability at December 31, 1995, under this law to be
approximately $40 million. This obligation is recognized in the accompanying
Balance Sheets.
Depreciation and Nuclear Decommissioning
Depreciation of the original cost of depreciable utility plant in service is
provided primarily by using composite straight-line rates, which approximated
3.2 percent in 1995 and 1994, and 3.3 percent in 1993. When property subject to
depreciation is retired or otherwise disposed of in the normal course of
business, its cost -- together with the cost of removal, less salvage -- is
charged to the accumulated provision for depreciation. Minor items of property
included in the original cost of the plant are retired when the related property
unit is retired. Depreciation expense includes an amount for the expected cost
of decommissioning nuclear facilities and removal of other facilities.
In 1988, the Nuclear Regulatory Commission (NRC) adopted regulations
requiring all licensees operating commercial power reactors to establish a plan
for providing, with reasonable assurance, funds for decommissioning. The company
has established external trust funds to comply with the NRC's regulations.
Amounts previously recorded in internal reserves are being transferred into the
external trust funds over set periods of time as approved by the APSC. The NRC's
minimum external funding requirements are based on a generic estimate of the
cost to decommission the radioactive portions of a nuclear unit based on the
size and type of reactor. The company has filed plans with the NRC to ensure
that -- over time -- the deposits and earnings of the external trust funds will
provide the minimum funding amounts prescribed by the NRC.
Site study cost is the estimate to decommission the facility as of the
site study year, and ultimate cost is the estimate to decommission the facility
as of retirement date. The estimated costs of decommissioning -- both site study
costs and ultimate costs -- at December 31, 1995, for Plant Farley were as
follows:
Plant
Farley
----------------
Site study basis (year) 1993
Decommissioning periods:
Beginning year 2017
Completion year 2029
-----------------------------------------------------------
(in millions)
Site study costs:
Radiated structures $ 489
Non-radiated structures 89
===========================================================
Total $ 578
===========================================================
(in millions)
Ultimate costs:
Radiated structures $ 1,504
Non-radiated structures 274
===========================================================
Total $ 1,778
===========================================================
II-68
<PAGE>
NOTES (continued)
Alabama Power Company 1995 Annual Report
(in millions)
Amount expensed in 1995 $ 18
-----------------------------------------------------------
Accumulated provisions:
Balance in external trust funds $108
Balance in internal reserves 49
===========================================================
Total $157
===========================================================
Assumed in ultimate costs:
Inflation rate 4.5%
Trust earning rate 7.0
-----------------------------------------------------------
Annual provisions for nuclear decommissioning are based on an annuity --
sinking fund -- method as approved by the APSC. The decommissioning costs
approved for ratemaking are $578 million for Plant Farley.
The decommissioning cost estimates are based on prompt dismantlement and
removal of the plant from service. The actual decommissioning costs may vary
from the above estimates because of changes in the assumed date of
decommissioning, changes in NRC requirements, or changes in the assumptions used
in making estimates.
Income Taxes
The company uses the liability method of accounting for deferred income taxes
and provides deferred income taxes for all significant income tax temporary
differences. Investment tax credits utilized are deferred and amortized to
income over the average lives of the related property.
Allowance For Funds Used During Construction (AFUDC)
AFUDC represents the estimated debt and equity costs of capital funds that are
necessary to finance the construction of new facilities. While cash is not
realized currently from such allowance, it increases the revenue requirement
over the service life of the plant through a higher rate base and higher
depreciation expense. The composite rate used to determine the amount of
allowance was 7.1 percent in 1995, 7.9 percent in 1994, and 7.8 percent in 1993.
AFUDC, net of income tax, as a percent of net income after dividends on
preferred stock was 1.7 percent in 1995 and 1.5 percent in both 1994 and 1993.
Utility Plant
Utility plant is stated at original cost. Original cost includes: materials;
labor; minor items of property; appropriate administrative and general costs;
payroll-related costs such as taxes, pensions, and other benefits; and the
estimated cost of funds used during construction. The cost of maintenance,
repairs and replacement of minor items of property is charged to maintenance
expense. The cost of replacements of property (exclusive of minor items of
property) is charged to utility plant.
Financial Instruments
In accordance with FASB Statement No. 107, Disclosure About Fair Value of
Financial Instruments, the company's only financial instrument for which the
carrying amount did not approximate fair value at December 31 was as follows:
Long-Term Debt
-------------------------
Carrying Fair
Year Amount Value
----------- ----------
(in millions)
1995 $2,451 $2,577
1994 2,446 2,323
------------------------------------------------------------
The fair value for long-term debt was based on either closing market price
or closing price of comparable instruments.
Materials and Supplies
Generally, materials and supplies include the cost of transmission,
distribution, and generating plant materials. Materials are charged to inventory
when purchased and then expensed or capitalized to plant, as appropriate, when
installed.
Natural Disaster Reserve
In September 1994, in response to a request by the company, the APSC issued an
order allowing the company to establish a Natural Disaster Reserve. As of
December 31, 1995, the accumulated provision amounted to $18.0 million. This
balance is down from the December 31, 1994 balance of $28.8 million, due to
charges related primarily to Hurricane Opal, somewhat offset by a $10 million
accrual to partially replenish the reserve. Regulatory treatment allows the
II-69
<PAGE>
NOTES (continued)
Alabama Power Company 1995 Annual Report
company to accrue $250 thousand per month, until the maximum accumulated
provision of $32 million is attained. However, in December 1995, the APSC
approved higher accruals to restore the reserve to its authorized level whenever
the balance in the reserve declines below $22.4 million.
2. RETIREMENT BENEFITS
Pension Plan
The company has a defined benefit, trusteed, non-contributory pension plan that
covers substantially all regular employees. Benefits are based on one of the
following formulas: years of service and final average pay or years of service
and a flat-dollar benefit. Primarily, the company uses the "entry age normal
method with a frozen initial liability" actuarial method for funding purposes,
subject to limitations under federal income tax regulations. Amounts funded to
the pension trusts are primarily invested in equity and fixed-income securities.
FASB Statement No. 87, Employers' Accounting for Pensions, requires use of the
"projected unit credit" actuarial method for financial reporting purposes.
Postretirement Benefits
The company also provides certain medical care and life insurance benefits for
retired employees. Substantially all employees may become eligible for these
benefits when they retire. Amounts funded are primarily invested in debt and
equity securities. In December 1993, the APSC issued an accounting policy
statement which requires the company to externally fund net annual
postretirement benefits.
FASB Statement No. 106, Employers' Accounting for Postretirement Benefits
Other Than Pensions, requires that medical care and life insurance benefits for
retired employees be accounted for on an accrual basis using a specified
actuarial method, "benefit/years-of-service."
Funded Status and Cost of Benefits
The following tables show actuarial results and assumptions for pension and
postretirement insurance benefits as computed under the requirements of
Statement Nos. 87 and 106, respectively. The funded status of the plans at
December 31 was as follows:
Pension
-----------------------
1995 1994
------------- ---------
(in millions)
Actuarial present value of
benefit obligations:
Vested benefits $ 604 $ 522
Non-vested benefits 25 18
- - ------------------------------------------------------------------
Accumulated benefit obligation 629 540
Additional amounts related to
projected salary increases 173 174
- - ------------------------------------------------------------------
Projected benefit obligation 802 714
Less:
Fair value of plan assets 1,256 1,059
Unrecognized net gain (331) (251)
Unrecognized prior service cost 21 23
Unrecognized transition asset (45) (51)
- - ------------------------------------------------------------------
Prepaid asset recognized in the
Balance Sheets $ 99 $ 66
==================================================================
Postretirement
Benefits
----------------------
1995 1994
----------------------
(in millions)
Actuarial present value of
benefit obligation:
Retirees and dependents $ 103 $ 96
Employees eligible to retire 31 22
Other employees 104 119
-----------------------------------------------------------
Accumulated benefit obligation 238 237
Less:
Fair value of plan assets 89 61
Unrecognized net loss 23 -
Unrecognized transition
obligation 72 120
-----------------------------------------------------------
Accrued liability recognized
in the Balance Sheets $ 54 $ 56
===========================================================
In 1995, the system companies announced a cost sharing program for
postretirement benefits. The program establishes limits on amounts the company
will pay to provide future retiree postretirement benefits. This change reduced
the 1995 accumulated postretirement benefit obligation by approximately $41
million.
II-70
<PAGE>
NOTES (continued)
Alabama Power Company 1995 Annual Report
The weighted average rates assumed in the actuarial calculations were:
1995 1994 1993
-------------------------------
Discount 7.3% 8.0% 7.5%
Annual salary increase 4.8 5.5 5.0
Long-term return on
plan assets 8.5 8.5 8.5
----------------------------------------------------------
An additional assumption used in measuring the accumulated postretirement
benefit obligation was a weighted average medical care cost trend rate of 9.8
percent for 1995, decreasing gradually to 5.3 percent through the year 2005 and
remaining at that level thereafter. An annual increase in the assumed medical
care cost trend rate of 1 percent would increase the accumulated benefit
obligation as of December 31, 1995, by $20 million and the aggregate of the
service and interest cost components of the net retiree cost by $4 million.
Components of the plans' net income are shown below:
Pension
--------------------------------------------------------------
1995 1994 1993
-----------------------------
(in millions)
Benefits earned during
the year $ 21.2 $ 20.8 $ 20.6
Interest cost on projected
benefit obligation 54.3 51.2 50.4
Actual (return) loss on plan
assets (236.3) 23.5 (146.3)
Net amortization and deferral 136.9 (116.2) 63.3
==============================================================
Net pension income $(23.9) $(20.7) $(12.0)
==============================================================
Of the above net pension income, $(17.1) million in 1995, $(15.7)
million in 1994, and $(8.9) million in 1993 were recorded in operating expenses,
and the remainder was recorded in construction and other accounts.
Postretirement
Benefits
--------------------
1995 1994 1993
--------------------
(in millions)
Benefits earned during the year $ 7 $ 8 $ 7
Interest cost on accumulated
benefit obligation 18 18 16
Amortization of transition
obligation 7 6 6
Actual (return) loss on plan
assets (10) 1 (5)
Net amortization and deferral 5 (4) 2
=============================================================
Net postretirement costs $ 27 $ 29 $ 26
=============================================================
Of the above net postretirement costs recorded, $22.7 million in 1995, $23
million in 1994, and $22 million in 1993 were charged to operating expenses and
the remainder was charged to construction and other accounts.
Work Force Reduction Programs
The company has incurred additional costs for work force reduction programs. The
costs related to these programs were $14.3 million, $8.2 million and $16.1
million for the years 1995, 1994 and 1993, respectively. In addition, certain
costs of these programs were deferred and are being amortized in accordance with
regulatory treatment. The unamortized balance of these costs was $48.4 million
at December 31, 1995.
3. LITIGATION AND REGULATORY MATTERS
Retail Rate Adjustment Procedures
In November 1982, the APSC adopted rates that provide for periodic adjustments
based upon the company's earned return on end-of-period retail common equity.
The rates also provide for adjustments to recognize the placing of new
generating facilities in retail service. Both increases and decreases have been
placed into effect since the adoption of these rates. The rate adjustment
procedures allow a return on common equity range of 13.0 percent to 14.5 percent
and limit increases or decreases in rates to 4 percent in any calendar year.
In June 1995, the APSC issued a rate order granting the company's request
for gradual adjustments to move toward parity among customer classes. This order
II-71
<PAGE>
NOTES (continued)
Alabama Power Company 1995 Annual Report
also calls for a moratorium on any periodic retail rate increases (but not
decreases) until July 2001.
In December 1995, the APSC issued an order authorizing the company to reduce
balance sheet items -- such as plant and deferred charges -- at any time the
company's actual base rate revenues exceed the budgeted revenues. In accordance
with this order, the company reduced the unamortized balance of Premium on
reacquired debt by $10 million in 1995.
The ratemaking procedures will remain in effect until the APSC votes to
modify or discontinue them.
FERC Reviews Equity Returns
In May 1991, the FERC ordered that hearings be conducted concerning the
reasonableness of the operating companies' wholesale rate schedules and
contracts that have a return on common equity of 13.75 percent or greater. The
contracts that could be affected by the hearings include substantially all of
the transmission, unit power, long-term power and other similar contracts. Any
change in the rate of return on common equity that may require refunds as a
result of this proceeding would be substantially for the period beginning in
July 1991 and ending in October 1992.
In August 1992, a FERC administrative law judge issued an opinion that
changes in rate schedules and contracts were not necessary and that the FERC
staff failed to show how any changes were in the public interest. The FERC staff
has filed exceptions to the administrative law judge's opinion, and the matter
remains pending before the FERC.
In August 1994, the FERC instituted another proceeding based on
substantially the same issues as in the 1991 proceeding. The second period under
review for possible refunds was substantially from October 1994 through December
1995. In November 1995, a FERC administrative law judge issued an opinion that
the FERC staff failed to meet its burden of proof, and therefore, no change in
the equity return was necessary. The FERC staff has filed exceptions to the
administrative law judge's opinion, and the matter is pending before the FERC.
If the rates of return on common equity recommended by the FERC staff were
applied to all of the schedules and contracts involved in both proceedings, and
refunds were ordered, the amount of refunds could range up to approximately $120
million at December 31, 1995 for the Southern Company, of which the company's
portion would be approximately $53 million. However, management believes that
rates are not excessive, and that refunds are not justified.
4. CAPITAL BUDGET
The company's capital expenditures are currently estimated to total $491 million
in 1996, $446 million in 1997, and $479 million in 1998. The estimates include
AFUDC of $7 million in 1996, $6 million in 1997, and $9 million in 1998. The
capital budget is subject to periodic review and revision, and actual capital
cost incurred may vary from the above estimates because of numerous factors.
These factors include: changes in business conditions; revised load growth
projections; changes in environmental regulations; changes in the existing
nuclear plant to meet new regulatory requirements; increasing costs of labor,
equipment, and materials; and cost of capital. At December 31, 1995, significant
purchase commitments were outstanding in connection with the construction
program. The company does not have any new baseload generating plants under
construction. However, the construction of combustion turbine peaking units of
approximately 320 megawatts is planned to be completed in 1996. In addition,
significant construction will continue related to transmission and distribution
facilities and the upgrading and extension of the useful lives of generating
plants.
5. FINANCING, INVESTMENT, AND
COMMITMENTS
General
To the extent possible, the company's construction program is expected to be
financed primarily from internal sources. Short-term debt will be utilized at
appropriate levels. The amounts available are discussed below. The company may
issue additional long-term debt and preferred stock for the purposes of debt
maturities, redeeming higher-cost securities, and meeting additional capital
requirements.
II-72
<PAGE>
NOTES (continued)
Alabama Power Company 1995 Annual Report
Financing
The ability of the company to finance its capital budget depends on the amount
of funds generated internally and the funds it can raise by external financing.
The company's primary sources of external financing are sales of first mortgage
bonds and preferred stock to the public and receipt of additional paid-in
capital from The Southern Company. In order to issue additional first mortgage
bonds and preferred stock, the company must comply with certain earnings
coverage requirements contained in its mortgage indenture and corporate charter.
The most restrictive of these provisions requires, for the issuance of
additional first mortgage bonds, that before-income-tax earnings, as defined,
cover pro forma annual interest charges on outstanding first mortgage bonds at
least twice; and for the issuance of additional preferred stock, that gross
income available for interest cover pro forma annual interest charges and
preferred stock dividends at least one and one-half times. The company's
coverages are at a level that would permit any necessary amount of security
sales at current interest and dividend rates.
Bank Credit Arrangements
The company, along with The Southern Company and Georgia Power Company, has
entered into agreements with several banks outside the service area to provide
$400 million of revolving credit to the companies through June 30, 1998. To
provide liquidity support for commercial paper programs, the company and Georgia
Power Company have exclusive right to $135 million and $165 million,
respectively, of the available credit. The companies have the option of
converting the short-term borrowings into term loans, payable in 12 equal
quarterly installments, with the first installment due at the end of the first
calendar quarter after the applicable termination date or at an earlier date at
the companies' option. In addition, these agreements require payment of
commitment fees based on the unused portions of the commitments or the
maintenance of compensating balances with the banks.
Additionally, the company maintains committed lines of credit in the amount
of $353.5 million which expire at various times during 1996 and, in certain
cases, provide for average annual compensating balances. Because the
arrangements are based on an average balance, the company does not consider any
of its cash balances to be restricted as of any specific date. Moreover, the
company borrows from time to time pursuant to arrangements with banks for
uncommitted lines of credit.
At December 31, 1995, the company had regulatory approval to have
outstanding up to $530 million of short-term borrowings. In February 1996, such
regulatory approval was increased to $750 million.
Assets Subject to Lien
The company's mortgage, as amended and supplemented, securing the first mortgage
bonds issued by the company, constitutes a direct lien on substantially all of
the company's fixed property and franchises.
Fuel Commitments
To supply a portion of the fuel requirements of its generating plants, the
company has entered into various long-term commitments for the procurement of
fossil and nuclear fuel. In most cases, these contracts contain provisions for
price escalations, minimum purchase levels and other financial commitments.
Total estimated long-term obligations at December 31, 1995, were as follows:
Year Amounts
- - ---- --------------
(in millions)
1996 $ 866
1997 852
1998 853
1999 672
2000 402
2001 - 2013 3,790
=========================================================
Total commitments $7,435
=========================================================
Operating Leases
The company has entered into coal rail car rental agreements with various terms
and expiration dates. At December 31, 1995, estimated minimum rental commitments
for noncancellable operating leases were as follows:
II-73
<PAGE>
NOTES (continued)
Alabama Power Company 1995 Annual Report
Year Amounts
- - ---- --------------------
(in millions)
1996 $ 2.8
1997 2.8
1998 2.9
1999 2.9
2000 2.9
2001 and thereafter 56.5
===============================================================
Total minimum payments $70.8
===============================================================
6. JOINT OWNERSHIP AGREEMENTS
The company and Georgia Power Company own equally all of the outstanding capital
stock of Southern Electric Generating Company (SEGCO), which owns electric
generating units with a total rated capacity of 1,019,680 kilowatts, together
with associated transmission facilities. The capacity of these units is sold
equally to the company and Georgia Power Company under a contract which, in
substance, requires payments sufficient to provide for the operating expenses,
taxes, interest expense and a return on equity, whether or not SEGCO has any
capacity and energy available. The company's share of expenses totaled $71
million in 1995, $74 million in 1994 and $86 million in 1993, and is included in
"Purchased power from affiliates" in the Statements of Income.
In addition, the company has guaranteed unconditionally the obligation of
SEGCO under an installment sale agreement for the purchase of certain pollution
control facilities at SEGCO's generating units, pursuant to which $24.5 million
principal amount of pollution control revenue bonds are outstanding. Georgia
Power Company has agreed to reimburse the company for the pro rata portion of
such obligation corresponding to its then proportionate ownership of stock of
SEGCO if the company is called upon to make such payment under its guaranty.
At December 31, 1995, the capitalization of SEGCO consisted of $54 million
of equity and $78 million of long-term debt on which the annual interest
requirement is $5.0 million. SEGCO paid dividends totaling $7.6 million in 1995,
$11.6 million in 1994, and $11.3 million in 1993, of which one-half of each was
paid to the company. SEGCO's net income was $8.1 million, $7.2 million, and $8.3
million for 1995, 1994 and 1993, respectively.
The company's percentage ownership and investment in jointly-owned
generating plants at December 31, 1995, follows:
Total
Megawatt Company
Facility (Type) Capacity Ownership
------------------- ------------ -------------
Greene County 500 60.00% (1)
(coal)
Plant Miller
Units 1 and 2 1,320 91.84% (2)
(coal)
------------------------------------------------------
(1) Jointly owned with an affiliate, Mississippi Power Company.
(2) Jointly owned with Alabama Electric Cooperative, Inc.
Company Accumulated
Facility Investment Depreciation
- - --------------------- -------------- -----------------
(in millions)
Greene County $ 90 $ 41
Plant Miller
Units 1 and 2 712 281
- - -------------------------------------------------------------
7. LONG-TERM POWER SALES AGREEMENTS
General
The company and the operating affiliates of The Southern Company have entered
into long-term contractual agreements for the sale of capacity and energy to
certain non-affiliated utilities located outside the system's service area. The
agreements for non-firm capacity expired in 1994. Other agreements -- expiring
at various dates discussed below -- are firm and pertain to capacity related to
specific generating units. Because the energy is generally sold at cost under
these agreements, revenues from capacity sales primarily affect profitability.
The company's capacity revenues have been as follows:
Unit Other
Year Power Long-Term Total
----------------------------------------------------------
(in millions)
1995 $ 157 $ - $ 157
1994 152 7 159
1993 144 15 159
----------------------------------------------------------
Unit power from Plant Miller is being sold to Florida Power Corporation
(FPC), Florida Power & Light Company (FP&L), Jacksonville Electric Authority
(JEA) and the City of Tallahassee, Florida. Under these agreements,
II-74
<PAGE>
NOTES (continued)
Alabama Power Company 1995 Annual Report
approximately 1,200 megawatts of capacity is scheduled to be sold through 1999.
Thereafter, these sales will remain at that approximate level -- unless reduced
by FP&L, FPC, and JEA for the periods after 1999 -- until the expiration of the
contracts in 2010.
Alabama Municipal Electric Authority (AMEA) Capacity Contracts
In August 1986, the company entered into a firm power purchase contract with
AMEA entitling AMEA to scheduled amounts of capacity (to a maximum 100
megawatts) for a period of 15 years commencing September 1, 1986 (1986
Contract). In October 1991, the company entered into a second firm power
purchase contract with AMEA entitling AMEA to scheduled amounts of additional
capacity (to a maximum 80 megawatts) for a period of 15 years commencing October
1, 1991 (1991 Contract). In both contracts the power will be sold to AMEA for
its member municipalities that previously were served directly by the company as
wholesale customers. Under the terms of the contracts, the company received
payments from AMEA representing the net present value of the revenues associated
with the respective capacity entitlements, discounted at effective annual rates
of 9.96 percent and 11.19 percent for the 1986 and 1991 contracts, respectively.
These payments are being recognized as operating revenues and the discounts are
being amortized to other interest expense as scheduled capacity is made
available over the terms of the contracts.
In order to secure AMEA's advance payments and the company's performance
obligation under the contracts, the company issued and delivered to an escrow
agent first mortgage bonds representing the maximum amount of liquidated damages
payable by the company in the event of a default under the contracts. No
principal or interest is payable on such bonds unless and until a default by the
company occurs. As the liquidated damages decline under the contracts, a portion
of the bonds equal to the decreases are returned to the company. At December 31,
1995, $137.5 million of such bonds was held by the escrow agent under the
contracts.
8. INCOME TAXES
Effective January 1, 1993, the company adopted FASB Statement No. 109,
Accounting for Income Taxes. The adoption resulted in the recording of
additional deferred income taxes and related regulatory assets and liabilities.
At December 31, 1995, the tax-related regulatory assets and liabilities were
$437 million and $386 million, respectively. These assets are attributable to
tax benefits flowed through to customers in prior years and to taxes applicable
to capitalized AFUDC. These liabilities are attributable to deferred taxes
previously recognized at rates higher than current enacted tax law and to
unamortized investment tax credits.
Details of the federal and state income tax provisions are as follows:
1995 1994 1993
--------------------------------
(in thousands)
Total provision for income taxes:
Federal --
Currently payable $166,105 $219,494 $149,680
Deferred --
current year 43,493 (48,153) 9,636
reversal of prior years (15,817) 15,932 19,653
Deferred investment tax
credits (75) (1) (2,106)
----------------------------------------------------------------
193,706 187,272 176,863
----------------------------------------------------------------
State --
Currently payable 18,108 20,565 14,297
Deferred --
current year 5,117 (4,067) 1,898
reversal of prior years (91) 3,676 3,913
----------------------------------------------------------------
23,134 20,174 20,108
----------------------------------------------------------------
Total 216,840 207,446 196,971
Less income taxes credited
to other income (14,142) (16,834) (10,239)
----------------------------------------------------------------
Federal and state income
taxes charged to operations $230,982 $224,280 $207,210
================================================================
The tax effects of temporary differences between the carrying amounts of
assets and liabilities in the financial statements and their respective tax
bases, which give rise to deferred tax assets and liabilities, are as follows:
II-75
<PAGE>
NOTES (continued)
Alabama Power Company 1995 Annual Report
1995 1994
- - --------------------------------------------------------------
(in millions)
Deferred tax liabilities:
Accelerated depreciation $ 780 $734
Property basis differences 491 513
Premium on reacquired debt 31 38
Fuel clause underrecovered 5 4
Other 37 26
- - --------------------------------------------------------------
Total 1,344 1,315
- - --------------------------------------------------------------
Deferred tax assets:
Capacity prepayments 35 36
Other deferred costs 26 27
Postretirement benefits 25 24
Accrued nuclear outage costs - 7
Unbilled revenue 13 13
Other 43 44
- - --------------------------------------------------------------
Total 142 151
- - --------------------------------------------------------------
Net deferred tax liabilities 1,202 1,164
Portion included in current assets
(liabilities), net (10) 17
- - --------------------------------------------------------------
Accumulated deferred income taxes
in the Balance Sheets $1,192 $1,181
==============================================================
Deferred investment tax credits are amortized over the life of the related
property with such amortization normally applied as a credit to reduce
depreciation in the Statements of Income. Credits amortized in this manner
amounted to $12 million in 1995 and $13 million in 1994 and 1993. At December
31, 1995, all investment tax credits available to reduce federal income taxes
payable had been utilized.
A reconciliation of the federal statutory income tax rate to the effective
income tax rate is as follows:
1995 1994 1993
--------------------------
Federal statutory rate 35.0% 35.0% 35.0%
State income tax,
net of federal deduction 2.5 2.2 2.3
Non-deductible book
depreciation 1.6 1.6 1.6
Differences in prior years'
deferred and current tax rates (1.8) (2.9) (1.6)
Other (1.4) (0.7) (2.9)
==============================================================
Effective income tax rate 35.9% 35.2% 34.4%
==============================================================
The Southern Company files a consolidated federal income tax return. Under a
joint consolidated income tax agreement, each subsidiary's current and deferred
tax expense is computed on a stand-alone basis. Tax benefits from losses of the
parent company are allocated to each subsidiary based on the ratio of taxable
income to total consolidated taxable income.
9. OTHER LONG-TERM DEBT
Details of other long-term debt at December 31 are as follows:
1995 1994
--------------------------
(in thousands)
Obligations incurred in
connection with the
sale of tax-exempt
pollution control revenue
bonds by public authorities-
Collateralized -
5.5% to 6.5 % due
2023-2024 $223,040 $223,040
Variable rates (5.0% to
6.0% at 1/1/96) due
2015-2017 89,800 89,800
Non-collateralized -
7.25% due 2003 1,000 1,000
7.4% to 9.375% due
2014-2016 21,000 152,500
5.8% due 2022 9,800 9,800
Variable rates (5.3% to
6.0% at 1/1/96) due
2022 131,500 -
- - -------------------------------------------------------------
476,140 476,140
Capitalized lease obligations 8,963 9,754
=============================================================
Total $485,103 $485,894
=============================================================
Pollution control obligations represent installment purchases of pollution
control facilities financed by funds derived from sales by public authorities of
revenue bonds. The company is required to make payments sufficient for the
authorities to meet principal and interest requirements of such bonds. With
respect to $312.8 million of such pollution control obligations, the company has
authenticated and delivered to the trustees a like principal amount of first
mortgage bonds as security for its obligations under the installment purchase
agreements. No principal or interest on these first mortgage bonds is payable
unless and until a default occurs on the installment purchase agreements.
II-76
<PAGE>
NOTES (continued)
Alabama Power Company 1995 Annual Report
The company has capitalized certain office building leases and a street light
lease. In December 1994, the company discontinued capital leases pertaining to
nuclear fuel.
The net book value of capitalized leases included in utility plant in service
was $5.6 million and $6.2 million at December 31, 1995 and 1994, respectively.
The estimated aggregate annual maturities of other long-term debt through 2000
are as follows: $0.9 million in 1996, $1.0 million in 1997, $1.0 million in
1998, $1.2 million in 1999 and $1.1 million in 2000.
10. LONG-TERM DEBT DUE WITHIN ONE YEAR
A summary of the improvement fund requirements and scheduled maturities and
redemptions of long-term debt due within one year at December 31 is as follows:
1995 1994
----------------------
(in thousands)
Bond improvement fund
requirements $20,047 $ 20,047
Less:
Portion to be satisfied by
certifying property additions - 20,047
------------------------------------------------------------
Cash sinking fund requirements $20,047 $ -
First mortgage bond maturities
and redemptions 63,750 -
Other long-term debt maturities
(Note 9) 885 796
============================================================
Total $84,682 $ 796
============================================================
The annual first mortgage bond improvement fund requirement is 1 percent
of the aggregate principal amount of bonds of each series authenticated, so long
as a portion of that series is outstanding, and may be satisfied by the deposit
of cash and/or reacquired bonds, the certification of unfunded property
additions or a combination thereof. The 1996 requirement of $20.0 million was
satisfied by the deposit of cash in 1996. Also in 1996 are first mortgage bond
maturities and redemptions of $64 million and maturities of $885 thousand
consisting primarily of capitalized office building leases and a street light
lease.
11. NUCLEAR INSURANCE
Under the Price-Anderson Amendments Act of 1988 (Act), the company maintains
agreements of indemnity with the NRC that, together with private insurance,
cover third-party liability arising from any nuclear incident occurring at Plant
Farley. The Act provides funds up to $8.9 billion for public liability claims
that could arise from a single nuclear incident. Plant Farley is insured against
this liability to a maximum of $200 million by private insurance, with the
remaining coverage provided by a mandatory program of deferred premiums which
could be assessed, after a nuclear incident, against all owners of nuclear
reactors. A company could be assessed up to $79 million per incident for each
licensed reactor it operates but not more than an aggregate of $10 million per
incident to be paid in a calendar year for each reactor. Such maximum
assessment, excluding any applicable state premium taxes, for the company is
$159 million per incident but not more than an aggregate of $20 million to be
paid for each incident in any one year.
The company is a member of Nuclear Mutual Limited (NML), a mutual insurer
established to provide property damage insurance in an amount up to $500 million
for members' nuclear generating facilities. The members are subject to a
retrospective premium assessment in the event that losses exceed accumulated
reserve funds. The company's maximum annual assessment per incident is limited
to $10 million under the current policy.
Additionally, the company has policies that currently provide
decontamination, excess property insurance, and premature decommissioning
coverage up to $2.25 billion for losses in excess of the $500 million NML
coverage. This excess insurance is provided by Nuclear Electric Insurance
Limited (NEIL), a mutual insurance company.
NEIL also covers the additional cost that would be incurred in obtaining
replacement power during a prolonged accidental outage at a member's nuclear
plant. Members can be insured against increased cost of replacement power in an
amount up to $3.5 million per week (starting 21 weeks after the outage) for one
year and up to $2.8 million per week for the second and third years.
Under each of the NEIL policies, members are subject to assessments if
losses each year exceed the accumulated funds available to the insurer under
II-77
<PAGE>
NOTES (continued)
Alabama Power Company 1995 Annual Report
that policy. The maximum annual assessments per incident under current policies
for the company would be $21 million for excess property damage and $8 million
for replacement power.
For all on-site property damage insurance policies for commercial nuclear
power plants, the NRC requires that the proceeds of such policies issued or
renewed on or after April 2, 1991, shall be dedicated first for the sole purpose
of placing the reactor in a safe and stable condition after an accident. Any
remaining proceeds are to be applied next toward the costs of decontamination
and debris removal operations ordered by the NRC, and any further remaining
proceeds are to be paid either to the company or to its bond trustees as may be
appropriate under the policies and applicable trust indentures.
The company participates in an insurance program for nuclear workers that
provides coverage for worker tort claims filed for bodily injury caused at
commercial nuclear power plants. In the event that claims for this insurance
exceed the accumulated reserve funds, the company could be subject to a maximum
total assessment of $6 million.
All retrospective assessments, whether generated for liability, property
or replacement power may be subject to applicable state premium taxes.
12. COMMON STOCK DIVIDEND
RESTRICTIONS
The company's first mortgage bond indenture contains various common stock
dividend restrictions that remain in effect as long as the bonds are
outstanding. At December 31, 1995, retained earnings of $807 million was
restricted against the payment of cash dividends on common stock under terms of
the mortgage indenture. Supplemental indentures in connection with future first
mortgage bond issues may contain more stringent common stock dividend
restrictions than those currently in effect.
13. QUARTERLY FINANCIAL INFORMATION
(Unaudited)
Summarized quarterly financial data for 1995 and 1994 are as follows:
Net Income
After
Dividends
Quarter Operating Operating on Preferred
Ended Revenues Income Stock
---------------- ----------------------------------------------
(in thousands)
March 1995 $646,771 $122,949 $ 65,328
June 1995 753,053 157,685 88,926
September 1995 938,284 233,322 167,938
December 1995 686,666 111,362 38,702
March 1994 $686,847 $128,623 $ 72,031
June 1994 759,399 162,696 98,668
September 1994 838,927 199,736 141,214
December 1994 649,969 104,949 44,425
----------------------------------------------------------------
The company's business is influenced by seasonal weather conditions.
II-78
<PAGE>
<TABLE>
<CAPTION>
SELECTED FINANCIAL AND OPERATING DATA
Alabama Power Company 1995 Annual Report
===================================================================================================================================
1995 1994 1993
- - -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating Revenues (in thousands) $3,024,774 $2,935,142 $3,007,609
Net Income after Dividends
on Preferred Stock (in thousands) $360,894 $356,338 $346,494
Cash Dividends on Common Stock (in thousands) $285,000 $268,000 $252,900
Return on Average Common Equity (percent) 13.61 13.86 13.94
Total Assets (in thousands) $8,744,360 $8,459,217 $8,248,683
Gross Property Additions (in thousands) $551,781 $536,785 $435,843
- - -----------------------------------------------------------------------------------------------------------------------------------
Capitalization (in thousands):
Common stock equity $2,690,374 $2,614,405 $2,526,348
Preferred stock 440,400 440,400 440,400
Preferred stock subject to mandatory redemption - - -
Long-term debt 2,374,948 2,455,013 2,362,852
- - -----------------------------------------------------------------------------------------------------------------------------------
Total (excluding amounts due within one year) $5,505,722 $5,509,818 $5,329,600
===================================================================================================================================
Capitalization Ratios (percent):
Common stock equity 48.9 47.4 47.4
Preferred stock 8.0 8.0 8.3
Long-term debt 43.1 44.6 44.3
- - -----------------------------------------------------------------------------------------------------------------------------------
Total (excluding amounts due within one year) 100.0 100.0 100.0
===================================================================================================================================
First Mortgage Bonds (in thousands):
Issued - 150,000 860,000
Retired - 20,387 699,788
Preferred Stock (in thousands):
Issued - - 158,000
Retired - - 207,000
- - -----------------------------------------------------------------------------------------------------------------------------------
Security Ratings:
First Mortgage Bonds -
Moody's A1 A1 A1
Standard and Poor's A+ A A
Duff & Phelps A+ A+ A+
Preferred Stock -
Moody's a2 a2 a2
Standard and Poor's A A- A-
Duff & Phelps A A- A-
- - -----------------------------------------------------------------------------------------------------------------------------------
Customers (year-end):
Residential 1,058,197 1,042,974 1,027,130
Commercial 166,480 162,239 157,337
Industrial 5,338 5,341 5,391
Other 725 716 713
- - -----------------------------------------------------------------------------------------------------------------------------------
Total 1,230,740 1,211,270 1,190,571
===================================================================================================================================
Employees (year-end) 7,261 7,996 8,009
</TABLE>
II-79
<PAGE>
<TABLE>
<CAPTION>
SELECTED FINANCIAL AND OPERATING DATA
Alabama Power Company 1995 Annual Report
===================================================================================================================================
1992 1991 1990
- - -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating Revenues (in thousands) $2,846,840 $2,846,794 $2,722,424
Net Income after Dividends
on Preferred Stock (in thousands) $338,555 $339,666 $312,803
Cash Dividends on Common Stock (in thousands) $273,300 $232,900 $220,800
Return on Average Common Equity (percent) 14.02 14.55 14.00
Total Assets (in thousands) $6,593,618 $6,549,462 $6,362,293
Gross Property Additions (in thousands) $367,463 $397,011 $444,680
- - -----------------------------------------------------------------------------------------------------------------------------------
Capitalization (in thousands):
Common stock equity $2,443,493 $2,387,198 $2,280,590
Preferred stock 489,400 484,400 484,400
Preferred stock subject to mandatory redemption - - 12,500
Long-term debt 2,202,473 2,382,635 2,397,931
- - -----------------------------------------------------------------------------------------------------------------------------------
Total (excluding amounts due within one year) $5,135,366 $5,254,233 $5,175,421
===================================================================================================================================
Capitalization Ratios (percent):
Common stock equity 47.6 45.4 44.1
Preferred stock 9.5 9.2 9.6
Long-term debt 42.9 45.4 46.3
- - -----------------------------------------------------------------------------------------------------------------------------------
Total (excluding amounts due within one year) 100.0 100.0 100.0
===================================================================================================================================
First Mortgage Bonds (in thousands):
Issued 745,000 250,000 -
Retired 931,797 227,695 33,122
Preferred Stock (in thousands):
Issued 150,000 - -
Retired 145,000 17,500 5,000
- - -----------------------------------------------------------------------------------------------------------------------------------
Security Ratings:
First Mortgage Bonds -
Moody's A1 A1 A1
Standard and Poor's A A A
Duff & Phelps A A A
Preferred Stock -
Moody's a2 a2 a2
Standard and Poor's A- A- A-
Duff & Phelps A- A- A-
- - -----------------------------------------------------------------------------------------------------------------------------------
Customers (year-end):
Residential 1,012,294 997,585 985,566
Commercial 152,530 148,228 144,340
Industrial 5,434 5,496 5,322
Other 704 697 690
- - -----------------------------------------------------------------------------------------------------------------------------------
Total 1,170,962 1,152,006 1,135,918
===================================================================================================================================
Employees (year-end) 8,116 8,513 9,473
</TABLE>
II-80A
<PAGE>
<TABLE>
<CAPTION>
SELECTED FINANCIAL AND OPERATING DATA
Alabama Power Company 1995 Annual Report
=================================================================================================================================
1989 1988 1987
- - ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating Revenues (in thousands) $2,629,354 $2,476,626 $2,574,634
Net Income after Dividends
on Preferred Stock (in thousands) $311,146 $283,475 $257,239
Cash Dividends on Common Stock (in thousands) $217,300 $212,700 $201,100
Return on Average Common Equity (percent) 14.53 14.03 13.56
Total Assets (in thousands) $6,279,431 $6,180,945 $5,912,000
Gross Property Additions (in thousands) $459,199 $643,892 $600,589
- - ---------------------------------------------------------------------------------------------------------------------------------
Capitalization (in thousands):
Common stock equity $2,188,811 $2,094,815 $1,946,747
Preferred stock 484,400 484,400 384,400
Preferred stock subject to mandatory redemption 17,500 22,500 27,500
Long-term debt 2,435,129 2,496,492 2,386,258
- - ---------------------------------------------------------------------------------------------------------------------------------
Total (excluding amounts due within one year) $5,125,840 $5,098,207 $4,744,905
=================================================================================================================================
Capitalization Ratios (percent):
Common stock equity 42.7 41.1 41.0
Preferred stock 9.8 9.9 8.7
Long-term debt 47.5 49.0 50.3
- - ---------------------------------------------------------------------------------------------------------------------------------
Total (excluding amounts due within one year) 100.0 100.0 100.0
=================================================================================================================================
First Mortgage Bonds (in thousands):
Issued - 150,000 200,000
Retired 75,650 42,445 108,082
Preferred Stock (in thousands):
Issued - 100,000 -
Retired 5,000 2,500 5,000
- - ---------------------------------------------------------------------------------------------------------------------------------
Security Ratings:
First Mortgage Bonds -
Moody's A1 A1 A1
Standard and Poor's A A A
Duff & Phelps A 6 6
Preferred Stock -
Moody's a2 a2 a2
Standard and Poor's A- A- A-
Duff & Phelps A- 7 7
- - ---------------------------------------------------------------------------------------------------------------------------------
Customers (year-end):
Residential 974,622 964,581 950,101
Commercial 141,265 137,955 134,533
Industrial 5,200 5,120 4,955
Other 684 678 713
- - ---------------------------------------------------------------------------------------------------------------------------------
Total 1,121,771 1,108,334 1,090,302
=================================================================================================================================
Employees (year-end) 9,698 10,302 10,457
</TABLE>
II-80B
<PAGE>
<TABLE>
<CAPTION>
SELECTED FINANCIAL AND OPERATING DATA
Alabama Power Company 1995 Annual Report
===========================================================================================================================
1986 1985
- - ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operating Revenues (in thousands) $2,549,574 $2,518,699
Net Income after Dividends
on Preferred Stock (in thousands) $273,456 $264,562
Cash Dividends on Common Stock (in thousands) $191,300 $185,700
Return on Average Common Equity (percent) 15.12 15.41
Total Assets (in thousands) $5,570,653 $5,722,263
Gross Property Additions (in thousands) $553,767 $568,073
- - ---------------------------------------------------------------------------------------------------------------------------
Capitalization (in thousands):
Common stock equity $1,847,608 $1,770,156
Preferred stock 384,400 384,400
Preferred stock subject to mandatory redemption 30,000 35,000
Long-term debt 2,210,108 2,349,373
- - ---------------------------------------------------------------------------------------------------------------------------
Total (excluding amounts due within one year) $4,472,116 $4,538,929
===========================================================================================================================
Capitalization Ratios (percent):
Common stock equity 41.3 39.0
Preferred stock 9.3 9.3
Long-term debt 49.4 51.7
- - ---------------------------------------------------------------------------------------------------------------------------
Total (excluding amounts due within one year) 100.0 100.0
===========================================================================================================================
First Mortgage Bonds (in thousands):
Issued 125,000 -
Retired 405,765 39,460
Preferred Stock (in thousands):
Issued - -
Retired 42,224 -
- - ---------------------------------------------------------------------------------------------------------------------------
Security Ratings:
First Mortgage Bonds -
Moody's A1 A1
Standard and Poor's A A
Duff & Phelps 6 6
Preferred Stock -
Moody's a2 a2
Standard and Poor's A- A-
Duff & Phelps 7 7
- - ---------------------------------------------------------------------------------------------------------------------------
Customers (year-end):
Residential 934,798 918,777
Commercial 130,540 126,644
Industrial 4,725 4,619
Other 697 755
- - ---------------------------------------------------------------------------------------------------------------------------
Total 1,070,760 1,050,795
===========================================================================================================================
Employees (year-end) 10,367 10,212
</TABLE>
II-80C
<PAGE>
<TABLE>
<CAPTION>
SELECTED FINANCIAL AND OPERATING DATA (continued)
Alabama Power Company 1995 Annual Report
===================================================================================================================================
1995 1994 1993
- - -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating Revenues (in thousands):
Residential $997,069 $913,146 $947,277
Commercial 670,453 647,202 634,895
Industrial 805,596 803,587 832,938
Other 13,619 13,515 13,344
- - -----------------------------------------------------------------------------------------------------------------------------------
Total retail 2,486,737 2,377,450 2,428,454
Sales for resale - non-affiliates 370,140 354,760 364,105
Sales for resale - affiliates 127,730 164,762 181,975
- - -----------------------------------------------------------------------------------------------------------------------------------
Total revenues from sales of electricity 2,984,607 2,896,972 2,974,534
Other revenues 40,167 38,170 33,075
- - -----------------------------------------------------------------------------------------------------------------------------------
Total $3,024,774 $2,935,142 $3,007,609
===================================================================================================================================
Kilowatt-Hour Sales (in thousands):
Residential 14,383,231 13,183,147 13,185,062
Commercial 10,043,220 9,645,798 9,185,462
Industrial 19,862,577 19,479,364 18,595,237
Other 186,848 185,876 181,673
- - -----------------------------------------------------------------------------------------------------------------------------------
Total retail 44,475,876 42,494,185 41,147,434
Sales for resale - non-affiliates 8,046,189 6,775,176 7,143,672
Sales for resale - affiliates 6,705,174 8,432,533 8,081,324
- - -----------------------------------------------------------------------------------------------------------------------------------
Total 59,227,239 57,701,894 56,372,430
===================================================================================================================================
Average Revenue Per Kilowatt-Hour (cents):
Residential 6.93 6.93 7.18
Commercial 6.68 6.71 6.91
Industrial 4.06 4.13 4.48
Total retail 5.59 5.59 5.90
Sales for resale 3.38 3.42 3.59
Total sales 5.04 5.02 5.28
Residential Average Annual Kilowatt-Hour
Use Per Customer 13,686 12,746 12,936
Residential Average Annual Revenue
Per Customer $948.71 $882.88 $929.36
Plant Nameplate Capacity Ratings (Note 1)
(year-end) (megawatts) 10,831 10,431 10,431
Territorial Peak-Hour Demand (megawatts) (Note 2):
Winter 7,958 8,217 7,152
Summer 10,090 9,028 9,457
Annual Load Factor (percent) (Note 2) 59.2 62.2 58.6
Plant Availability (percent):
Fossil-steam 88.3 86.9 89.7
Nuclear 81.1 92.5 86.6
- - -----------------------------------------------------------------------------------------------------------------------------------
Source of Energy Supply (percent):
Coal 67.1 62.9 63.9
Nuclear 17.1 21.7 20.1
Hydro 7.0 8.4 6.9
Oil and gas 0.4 * *
Purchased power -
From non-affiliates 2.7 1.3 1.1
From affiliates 5.7 5.7 8.0
- - -----------------------------------------------------------------------------------------------------------------------------------
Total 100.0 100.0 100.0
===================================================================================================================================
Total Fuel Economy Data (Note 1):
BTU per net kilowatt-hour generated 10,025 9,961 10,003
Cost of fuel per million BTU (cents) 148.68 157.62 173.66
Average cost of fuel per net kilowatt-hour generated (cents) 1.49 1.57 1.74
===================================================================================================================================
Notes:
(1) Generating capacity and fuel data includes Alabama Power Company's 50% portion of SEGCO.
(2) Includes Southeastern Power Administration allotment.
* Less than one-tenth of one percent.
</TABLE>
II-81
<PAGE>
<TABLE>
<CAPTION>
SELECTED FINANCIAL AND OPERATING DATA (continued)
Alabama Power Company 1995 Annual Report
===================================================================================================================================
1992 1991 1990
- - -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating Revenues (in thousands):
Residential $845,660 $864,347 $825,645
Commercial 589,816 582,730 551,634
Industrial 800,311 790,224 777,580
Other 12,734 12,662 12,103
- - -----------------------------------------------------------------------------------------------------------------------------------
Total retail 2,248,521 2,249,963 2,166,962
Sales for resale - non-affiliates 407,791 407,912 434,996
Sales for resale - affiliates 158,088 159,375 93,473
- - -----------------------------------------------------------------------------------------------------------------------------------
Total revenues from sales of electricity 2,814,400 2,817,250 2,695,431
Other revenues 32,440 29,544 26,993
- - -----------------------------------------------------------------------------------------------------------------------------------
Total $2,846,840 $2,846,794 $2,722,424
===================================================================================================================================
Kilowatt-Hour Sales (in thousands):
Residential 12,069,268 12,324,898 11,996,794
Commercial 8,629,869 8,526,131 8,201,534
Industrial 18,260,274 17,511,579 17,713,153
Other 176,798 174,760 170,420
- - -----------------------------------------------------------------------------------------------------------------------------------
Total retail 39,136,209 38,537,368 38,081,901
Sales for resale - non-affiliates 8,382,571 8,810,442 10,277,060
Sales for resale - affiliates 7,210,697 7,784,285 4,519,275
- - -----------------------------------------------------------------------------------------------------------------------------------
Total 54,729,477 55,132,095 52,878,236
===================================================================================================================================
Average Revenue Per Kilowatt-Hour (cents):
Residential 7.01 7.01 6.88
Commercial 6.83 6.83 6.73
Industrial 4.38 4.51 4.39
Total retail 5.75 5.84 5.69
Sales for resale 3.63 3.42 3.57
Total sales 5.14 5.11 5.10
Residential Average Annual Kilowatt-Hour
Use Per Customer 12,017 12,435 12,256
Residential Average Annual Revenue
Per Customer $842.00 $872.04 $843.50
Plant Nameplate Capacity Ratings (Note 1)
(year-end) (megawatts) 10,431 10,539 9,879
Territorial Peak-Hour Demand (megawatts) (Note 2):
Winter 7,077 6,586 6,293
Summer 8,801 8,627 8,878
Annual Load Factor (percent) (Note 2) 59.6 59.9 57.4
Plant Availability (percent):
Fossil-steam 88.9 93.1 92.2
Nuclear 80.2 87.0 86.5
- - -----------------------------------------------------------------------------------------------------------------------------------
Source of Energy Supply (percent):
Coal 64.3 61.5 57.0
Nuclear 19.0 20.8 21.6
Hydro 8.5 8.2 8.7
Oil and gas * * 0.1
Purchased power -
From non-affiliates 1.2 1.6 0.9
From affiliates 7.0 7.9 11.7
- - -----------------------------------------------------------------------------------------------------------------------------------
Total 100.0 100.0 100.0
===================================================================================================================================
Total Fuel Economy Data (Note 1):
BTU per net kilowatt-hour generated 10,000 9,985 10,072
Cost of fuel per million BTU (cents) 164.57 170.49 171.55
Average cost of fuel per net kilowatt-hour generated (cents) 1.65 1.70 1.73
===================================================================================================================================
Notes:
(1) Generating capacity and fuel data includes Alabama Power Company's 50% portion of SEGCO.
(2) Includes Southeastern Power Administration allotment.
* Less than one-tenth of one percent.
</TABLE>
II-82A
<PAGE>
<TABLE>
<CAPTION>
SELECTED FINANCIAL AND OPERATING DATA (continued)
Alabama Power Company 1995 Annual Report
================================================================================================================================
1989 1988 1987
- - --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating Revenues (in thousands):
Residential $781,982 $761,805 $759,957
Commercial 533,487 510,910 501,088
Industrial 762,274 738,755 721,298
Other 11,743 11,255 10,968
- - --------------------------------------------------------------------------------------------------------------------------------
Total retail 2,089,486 2,022,725 1,993,311
Sales for resale - non-affiliates 409,202 355,362 443,880
Sales for resale - affiliates 104,488 76,691 118,746
- - --------------------------------------------------------------------------------------------------------------------------------
Total revenues from sales of electricity 2,603,176 2,454,778 2,555,937
Other revenues 26,178 21,848 18,697
- - --------------------------------------------------------------------------------------------------------------------------------
Total $2,629,354 $2,476,626 $2,574,634
================================================================================================================================
Kilowatt-Hour Sales (in thousands):
Residential 11,346,736 11,332,285 11,149,225
Commercial 7,915,685 7,711,092 7,476,924
Industrial 17,360,791 16,881,342 15,969,075
Other 166,485 165,122 159,422
- - --------------------------------------------------------------------------------------------------------------------------------
Total retail 36,789,697 36,089,841 34,754,646
Sales for resale - non-affiliates 10,292,329 7,905,750 10,523,554
Sales for resale - affiliates 5,048,743 3,551,142 4,963,997
- - --------------------------------------------------------------------------------------------------------------------------------
Total 52,130,769 47,546,733 50,242,197
================================================================================================================================
Average Revenue Per Kilowatt-Hour (cents):
Residential 6.89 6.72 6.82
Commercial 6.74 6.63 6.70
Industrial 4.39 4.38 4.52
Total retail 5.68 5.60 5.74
Sales for resale 3.35 3.77 3.63
Total sales 4.99 5.16 5.09
Residential Average Annual Kilowatt-Hour
Use Per Customer 11,717 11,839 11,848
Residential Average Annual Revenue
Per Customer $807.50 $795.84 $807.61
Plant Nameplate Capacity Ratings (Note 1)
(year-end) (megawatts) 9,879 9,279 9,337
Territorial Peak-Hour Demand (megawatts) (Note 2):
Winter 7,264 6,377 6,138
Summer 8,256 7,991 7,886
Annual Load Factor (percent) (Note 2) 59.5 59.6 58.3
Plant Availability (percent):
Fossil-steam 90.7 91.3 90.2
Nuclear 83.1 91.9 83.3
- - --------------------------------------------------------------------------------------------------------------------------------
Source of Energy Supply (percent):
Coal 54.1 53.9 52.5
Nuclear 21.0 26.1 21.7
Hydro 11.0 4.8 6.3
Oil and gas 0.1 0.1 0.2
Purchased power -
From non-affiliates 1.8 0.5 0.2
From affiliates 12.0 14.6 19.1
- - --------------------------------------------------------------------------------------------------------------------------------
Total 100.0 100.0 100.0
================================================================================================================================
Total Fuel Economy Data (Note 1):
BTU per net kilowatt-hour generated 10,061 10,137 10,214
Cost of fuel per million BTU (cents) 172.20 168.21 176.72
Average cost of fuel per net kilowatt-hour generated (cents) 1.73 1.71 1.80
================================================================================================================================
Notes:
(1) Generating capacity and fuel data includes Alabama Power Company's 50% portion of SEGCO.
(2) Includes Southeastern Power Administration allotment.
* Less than one-tenth of one percent.
</TABLE>
II-82B
<PAGE>
<TABLE>
<CAPTION>
SELECTED FINANCIAL AND OPERATING DATA (continued)
Alabama Power Company 1995 Annual Report
===========================================================================================================================
1986 1985
- - ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operating Revenues (in thousands):
Residential $738,864 $684,970
Commercial 481,676 453,651
Industrial 705,395 717,078
Other 10,811 10,129
- - ---------------------------------------------------------------------------------------------------------------------------
Total retail 1,936,746 1,865,828
Sales for resale - non-affiliates 472,938 539,343
Sales for resale - affiliates 120,911 95,733
- - ---------------------------------------------------------------------------------------------------------------------------
Total revenues from sales of electricity 2,530,595 2,500,904
Other revenues 18,979 17,795
- - ---------------------------------------------------------------------------------------------------------------------------
Total $2,549,574 $2,518,699
===========================================================================================================================
Kilowatt-Hour Sales (in thousands):
Residential 10,606,698 9,814,814
Commercial 7,015,589 6,593,645
Industrial 15,025,806 15,215,276
Other 153,282 146,119
- - ---------------------------------------------------------------------------------------------------------------------------
Total retail 32,801,375 31,769,854
Sales for resale - non-affiliates 9,064,049 12,158,464
Sales for resale - affiliates 4,456,360 3,588,338
- - ---------------------------------------------------------------------------------------------------------------------------
Total 46,321,784 47,516,656
===========================================================================================================================
Average Revenue Per Kilowatt-Hour (cents):
Residential 6.97 6.98
Commercial 6.87 6.88
Industrial 4.69 4.71
Total retail 5.90 5.87
Sales for resale 4.39 4.03
Total sales 5.46 5.26
Residential Average Annual Kilowatt-Hour
Use Per Customer 11,457 10,781
Residential Average Annual Revenue
Per Customer $798.09 $752.43
Plant Nameplate Capacity Ratings (Note 1)
(year-end) (megawatts) 9,337 9,337
Territorial Peak-Hour Demand (megawatts) (Note 2):
Winter 6,257 6,191
Summer 7,892 7,570
Annual Load Factor (percent) (Note 2) 56.2 57.2
Plant Availability (percent):
Fossil-steam 88.5 90.5
Nuclear 83.8 81.0
- - ---------------------------------------------------------------------------------------------------------------------------
Source of Energy Supply (percent):
Coal 58.8 55.7
Nuclear 23.8 22.4
Hydro 4.2 6.2
Oil and gas 0.1 0.1
Purchased power -
From non-affiliates 2.0 1.7
From affiliates 11.1 13.9
- - ---------------------------------------------------------------------------------------------------------------------------
Total 100.0 100.0
===========================================================================================================================
Total Fuel Economy Data (Note 1):
BTU per net kilowatt-hour generated 10,209 10,229
Cost of fuel per million BTU (cents) 179.65 185.74
Average cost of fuel per net kilowatt-hour generated (cents) 1.83 1.90
===========================================================================================================================
Notes:
(1) Generating capacity and fuel data includes Alabama Power Company's 50% portion of SEGCO.
(2) Includes Southeastern Power Administration allotment.
* Less than one-tenth of one percent.
</TABLE>
II-82C
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF INCOME
Alabama Power Company
================================================================================================================================
For the Years Ended December 31, 1995* 1994* 1993*
- - --------------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
Operating Revenues:
Revenues $ 2,897,044 $ 2,770,380 $ 2,825,634
Revenues from affiliates 127,730 164,762 181,975
- - --------------------------------------------------------------------------------------------------------------------------------
Total operating revenues 3,024,774 2,935,142 3,007,609
- - --------------------------------------------------------------------------------------------------------------------------------
Operating Expenses:
Operation --
Fuel 791,819 801,948 877,099
Purchased power from non-affiliates 30,065 15,158 15,230
Purchased power from affiliates 112,826 100,888 120,330
Proceeds from settlement of disputed contracts - - (2,568)
Other 501,876 458,917 473,383
Maintenance 243,218 262,102 252,506
Depreciation and amortization 303,050 292,420 290,310
Taxes other than income taxes 185,620 183,425 178,997
Federal and state income taxes 230,982 224,280 207,210
- - --------------------------------------------------------------------------------------------------------------------------------
Total operating expenses 2,399,456 2,339,138 2,412,497
- - --------------------------------------------------------------------------------------------------------------------------------
Operating Income 625,318 596,004 595,112
Other Income (Expense):
Allowance for equity funds used during construction 1,649 3,239 3,260
Income from subsidiary 4,051 3,588 4,127
Charitable foundation (11,542) (13,500) (3,000)
Interest income 13,768 16,944 20,775
Other, net (21,536) (30,569) (24,420)
Income taxes applicable to other income 14,142 16,834 10,239
- - --------------------------------------------------------------------------------------------------------------------------------
Income Before Interest Charges 625,850 592,540 606,093
- - --------------------------------------------------------------------------------------------------------------------------------
Interest Charges:
Interest on long-term debt 180,714 178,045 184,861
Allowance for debt funds used during construction (7,067) (3,548) (2,992)
Interest on interim obligations 16,917 5,939 3,760
Amortization of debt discount, premium, and expense, net 20,259 9,623 8,937
Other interest charges 27,064 19,908 35,474
- - --------------------------------------------------------------------------------------------------------------------------------
Net interest charges 237,887 209,967 230,040
- - --------------------------------------------------------------------------------------------------------------------------------
Net Income 387,963 382,573 376,053
Dividends on Preferred Stock 27,069 26,235 29,559
- - --------------------------------------------------------------------------------------------------------------------------------
Net Income After Dividends on Preferred Stock $ 360,894 $ 356,338 $ 346,494
================================================================================================================================
* Includes the effect of recognizing, beginning in 1987, retail service
rendered but not yet billed to customers.
</TABLE>
II-83
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF INCOME
Alabama Power Company
============================================================================================================================
For the Years Ended December 31, 1992* 1991* 1990*
- - ----------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
Operating Revenues:
Revenues $ 2,688,752 $ 2,687,419 $ 2,628,951
Revenues from affiliates 158,088 159,375 93,473
- - ----------------------------------------------------------------------------------------------------------------------------
Total operating revenues 2,846,840 2,846,794 2,722,424
- - ----------------------------------------------------------------------------------------------------------------------------
Operating Expenses:
Operation --
Fuel 794,438 812,667 756,501
Purchased power from non-affiliates 14,242 21,080 11,185
Purchased power from affiliates 107,230 119,602 165,982
Proceeds from settlement of disputed contracts (641) (14,819) -
Other 446,477 435,908 411,559
Maintenance 237,071 229,114 215,304
Depreciation and amortization 280,881 271,433 262,817
Taxes other than income taxes 172,095 169,639 163,567
Federal and state income taxes 201,925 200,612 185,954
- - ----------------------------------------------------------------------------------------------------------------------------
Total operating expenses 2,253,718 2,245,236 2,172,869
- - ----------------------------------------------------------------------------------------------------------------------------
Operating Income 593,122 601,558 549,555
Other Income (Expense):
Allowance for equity funds used during construction 2,071 2,368 25,487
Income from subsidiary 4,635 4,576 4,182
Charitable foundation (6,887) (6,500) (17,500)
Interest income 14,804 14,356 12,006
Other, net (11,019) (9,926) (8,235)
Income taxes applicable to other income 8,947 7,523 11,081
- - ----------------------------------------------------------------------------------------------------------------------------
Income Before Interest Charges 605,673 613,955 576,576
- - ----------------------------------------------------------------------------------------------------------------------------
Interest Charges:
Interest on long-term debt 206,871 214,107 221,527
Allowance for debt funds used during construction (2,416) (6,903) (23,339)
Interest on interim obligations 3,704 13,385 10,252
Amortization of debt discount, premium, and expense, net 4,392 2,634 3,706
Other interest charges 19,381 14,927 13,115
- - ----------------------------------------------------------------------------------------------------------------------------
Net interest charges 231,932 238,150 225,261
- - ----------------------------------------------------------------------------------------------------------------------------
Net Income 373,741 375,805 351,315
Dividends on Preferred Stock 35,186 36,139 38,512
- - ----------------------------------------------------------------------------------------------------------------------------
Net Income After Dividends on Preferred Stock $ 338,555 $ 339,666 $ 312,803
============================================================================================================================
* Includes the effect of recognizing, beginning in 1987, retail service
rendered but not yet billed to customers.
</TABLE>
II-84A
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF INCOME
Alabama Power Company
============================================================================================================================
For the Years Ended December 31, 1989* 1988* 1987*
- - ----------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
Operating Revenues:
Revenues $ 2,524,866 $ 2,399,935 $ 2,455,888
Revenues from affiliates 104,488 76,691 118,746
- - ----------------------------------------------------------------------------------------------------------------------------
Total operating revenues 2,629,354 2,476,626 2,574,634
- - ----------------------------------------------------------------------------------------------------------------------------
Operating Expenses:
Operation --
Fuel 712,453 676,423 696,763
Purchased power from non-affiliates 28,272 8,407 6,703
Purchased power from affiliates 163,267 185,390 257,052
Proceeds from settlement of disputed contracts - - -
Other 380,536 400,879 410,575
Maintenance 202,633 197,225 199,617
Depreciation and amortization 247,973 225,123 212,072
Taxes other than income taxes 154,398 148,681 141,422
Federal and state income taxes 188,507 143,614 190,575
- - ----------------------------------------------------------------------------------------------------------------------------
Total operating expenses 2,078,039 1,985,742 2,114,779
- - ----------------------------------------------------------------------------------------------------------------------------
Operating Income 551,315 490,884 459,855
Other Income (Expense):
Allowance for equity funds used during construction 29,515 39,047 27,663
Income from subsidiary 3,750 3,302 3,440
Charitable foundation (25,000) - -
Interest income 10,871 9,914 7,044
Other, net (4,313) (13,694) (816)
Income taxes applicable to other income 13,629 8,034 849
- - ----------------------------------------------------------------------------------------------------------------------------
Income Before Interest Charges 579,767 537,487 498,035
- - ----------------------------------------------------------------------------------------------------------------------------
Interest Charges:
Interest on long-term debt 230,046 225,522 205,824
Allowance for debt funds used during construction (27,627) (31,830) (24,235)
Interest on interim obligations 9,098 5,714 7,221
Amortization of debt discount, premium, and expense, net 4,469 4,411 4,405
Other interest charges 13,112 13,715 14,662
- - ----------------------------------------------------------------------------------------------------------------------------
Net interest charges 229,098 217,532 207,877
- - ----------------------------------------------------------------------------------------------------------------------------
Net Income 350,669 319,955 290,158
Dividends on Preferred Stock 39,523 36,480 32,919
- - ----------------------------------------------------------------------------------------------------------------------------
Net Income After Dividends on Preferred Stock $ 311,146 $ 283,475 $ 257,239
============================================================================================================================
* Includes the effect of recognizing, beginning in 1987, retail service
rendered but not yet billed to customers.
</TABLE>
II-84B
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF INCOME
Alabama Power Company
=============================================================================================================
For the Years Ended December 31, 1986 1985
- - -------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C>
Operating Revenues:
Revenues $ 2,428,663 $ 2,422,966
Revenues from affiliates 120,911 95,733
- - -------------------------------------------------------------------------------------------------------------
Total operating revenues 2,549,574 2,518,699
- - -------------------------------------------------------------------------------------------------------------
Operating Expenses:
Operation --
Fuel 738,367 743,463
Purchased power from non-affiliates 23,889 25,990
Purchased power from affiliates 156,091 187,041
Proceeds from settlement of disputed contracts - -
Other 350,671 308,437
Maintenance 203,972 210,143
Depreciation and amortization 201,803 183,779
Taxes other than income taxes 135,248 128,648
Federal and state income taxes 255,400 248,774
- - -------------------------------------------------------------------------------------------------------------
Total operating expenses 2,065,441 2,036,275
- - -------------------------------------------------------------------------------------------------------------
Operating Income 484,133 482,424
Other Income (Expense):
Allowance for equity funds used during construction 27,455 32,985
Income from subsidiary 2,967 3,417
Charitable foundation - -
Interest income 11,422 20,874
Other, net (3,738) (4,447)
Income taxes applicable to other income 185 (4,941)
- - -------------------------------------------------------------------------------------------------------------
Income Before Interest Charges 522,424 530,312
- - -------------------------------------------------------------------------------------------------------------
Interest Charges:
Interest on long-term debt 226,110 248,073
Allowance for debt funds used during construction (24,334) (29,048)
Interest on interim obligations 1,159 -
Amortization of debt discount, premium, and expense, net 3,313 1,145
Other interest charges 8,695 4,234
- - -------------------------------------------------------------------------------------------------------------
Net interest charges 214,943 224,404
- - -------------------------------------------------------------------------------------------------------------
Net Income 307,481 305,908
Dividends on Preferred Stock 34,025 41,346
- - -------------------------------------------------------------------------------------------------------------
Net Income After Dividends on Preferred Stock $ 273,456 $ 264,562
=============================================================================================================
</TABLE>
II-84C
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS
Alabama Power Company
==============================================================================================================================
For the Years Ended December 31, 1995 1994 1993
- - ------------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
Operating Activities:
Net income $ 387,963 $ 382,573 $ 376,053
Adjustments to reconcile net income to net
cash provided by operating activities --
Depreciation and amortization 371,382 359,791 356,499
Deferred income taxes, net 32,702 (32,612) 35,100
Deferred investment tax credits, net (75) (1) (2,106)
Allowance for equity funds used during construction (1,649) (3,239) (3,260)
Non-cash proceeds from settlement of disputed contracts - - -
Other, net 33,244 28,656 36,493
Changes in certain current assets and liabilities --
Receivables, net (54,209) 19,390 19,215
Inventories 18,425 (38,946) 51,630
Payables (63,656) (21,240) 31,544
Taxes accrued 551 6,856 (9,959)
Energy cost recovery, retail 1,177 16,907 (56,128)
Other (15,895) (14,235) (21,110)
- - ------------------------------------------------------------------------------------------------------------------------------
Net cash provided from operating activities 709,960 703,900 813,971
- - ------------------------------------------------------------------------------------------------------------------------------
Investing Activities:
Gross property additions (551,781) (536,785) (435,843)
Sales of property - - -
Other (53,321) (26,632) (741)
- - ------------------------------------------------------------------------------------------------------------------------------
Net cash used for investing activities (605,102) (563,417) (436,584)
- - ------------------------------------------------------------------------------------------------------------------------------
Financing Activities and Capital Contributions:
Proceeds:
Preferred stock - - 158,000
First mortgage bonds - 150,000 860,000
Pollution control bonds 131,500 179,750 144,436
Other long-term debt - 28,970 35,878
Capital contributions from parent company - - -
Prepaid capacity revenues - - -
Retirements:
Preferred stock - - (207,000)
First mortgage bonds - (20,387) (699,788)
Pollution control bonds (131,500) (179,750) (135,315)
Other long-term debt (791) (125,630) (46,014)
Interim obligations, net 210,134 139,882 (156,917)
Payment of preferred stock dividends (27,118) (25,431) (32,099)
Payment of common stock dividends (285,000) (268,000) (252,900)
Miscellaneous (4,143) (8,444) (56,064)
- - ------------------------------------------------------------------------------------------------------------------------------
Net cash provided from (used for) financing activities (106,918) (129,040) (387,783)
- - ------------------------------------------------------------------------------------------------------------------------------
Net Change in Cash (2,060) 11,443 (10,396)
Cash at Beginning of Year 14,676 3,233 13,629
- - ------------------------------------------------------------------------------------------------------------------------------
Cash at End of Year $ 12,616 $ 14,676 $ 3,233
==============================================================================================================================
( ) Denotes use of cash.
</TABLE>
II-85
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS
Alabama Power Company
==============================================================================================================================
For the Years Ended December 31, 1992 1991 1990
- - ------------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
Operating Activities:
Net income $ 373,741 $ 375,805 $ 351,315
Adjustments to reconcile net income to net
cash provided by operating activities --
Depreciation and amortization 338,421 337,978 331,858
Deferred income taxes, net 23,514 (5,779) 64,480
Deferred investment tax credits, net - (1,089) 132
Allowance for equity funds used during construction (2,071) (2,368) (25,487)
Non-cash proceeds from settlement of disputed contracts (641) (13,750) -
Other, net (2,657) 26,614 19,899
Changes in certain current assets and liabilities --
Receivables, net (11,010) 9,178 12,005
Inventories 12,704 (17,374) (40,901)
Payables 2,158 28,889 6,597
Taxes accrued (21,120) 24,828 (6,167)
Energy cost recovery, retail 45,509 (12,304) (42,535)
Other 10,629 (37,906) 14,144
- - ------------------------------------------------------------------------------------------------------------------------------
Net cash provided from operating activities 769,177 712,722 685,340
- - ------------------------------------------------------------------------------------------------------------------------------
Investing Activities:
Gross property additions (367,463) (397,011) (444,680)
Sales of property 43,556 - -
Other (13,379) (36,083) 6,935
- - ------------------------------------------------------------------------------------------------------------------------------
Net cash used for investing activities (337,286) (433,094) (437,745)
- - ------------------------------------------------------------------------------------------------------------------------------
Financing Activities and Capital Contributions:
Proceeds:
Preferred stock 150,000 - -
First mortgage bonds 745,000 250,000 -
Pollution control bonds - - -
Other long-term debt 48,382 12,906 54,831
Capital contributions from parent company - - -
Prepaid capacity revenues - 52,900 -
Retirements:
Preferred stock (145,000) (17,500) (5,000)
First mortgage bonds (931,797) (227,695) (33,122)
Pollution control bonds (335) (250) (250)
Other long-term debt (53,888) (48,428) (56,895)
Interim obligations, net 120,917 (13,500) 59,500
Payment of preferred stock dividends (35,704) (36,829) (38,245)
Payment of common stock dividends (273,300) (232,900) (220,800)
Miscellaneous (53,697) (17,732) (293)
- - ------------------------------------------------------------------------------------------------------------------------------
Net cash provided from (used for) financing activities (429,422) (279,028) (240,274)
- - ------------------------------------------------------------------------------------------------------------------------------
Net Change in Cash 2,469 600 7,321
Cash at Beginning of Year 11,160 10,560 3,239
- - ------------------------------------------------------------------------------------------------------------------------------
Cash at End of Year $ 13,629 $ 11,160 $ 10,560
==============================================================================================================================
( ) Denotes use of cash.
</TABLE>
II-86A
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS
Alabama Power Company
==============================================================================================================================
For the Years Ended December 31, 1989 1988 1987
- - ------------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
Operating Activities:
Net income $ 350,669 $ 319,955 $ 290,158
Adjustments to reconcile net income to net
cash provided by operating activities --
Depreciation and amortization 322,042 296,234 270,492
Deferred income taxes, net 31,715 37,952 107,824
Deferred investment tax credits, net 6,917 15,019 23,477
Allowance for equity funds used during construction (29,515) (39,047) (27,663)
Non-cash proceeds from settlement of disputed contracts - - -
Other, net (5,297) 16,106 67,445
Changes in certain current assets and liabilities --
Receivables, net (10,436) 8,822 (133,468)
Inventories 20,408 (23,182) (26,255)
Payables 16,259 (12,957) 39,645
Taxes accrued 1,547 (7,754) 516
Energy cost recovery, retail 39,164 - -
Other 28,701 (18,658) 4,464
- - ------------------------------------------------------------------------------------------------------------------------------
Net cash provided from operating activities 772,174 592,490 616,635
- - ------------------------------------------------------------------------------------------------------------------------------
Investing Activities:
Gross property additions (459,199) (643,892) (600,589)
Sales of property - - -
Other 3,768 23,161 17,010
- - ------------------------------------------------------------------------------------------------------------------------------
Net cash used for investing activities (455,431) (620,731) (583,579)
- - ------------------------------------------------------------------------------------------------------------------------------
Financing Activities and Capital Contributions:
Proceeds:
Preferred stock - 100,000 -
First mortgage bonds - 150,000 200,000
Pollution control bonds 53,700 - 432
Other long-term debt 55,176 62,515 69,786
Capital contributions from parent company - 79,500 43,000
Prepaid capacity revenues - - -
Retirements:
Preferred stock (5,000) (2,500) (5,000)
First mortgage bonds (75,650) (42,445) (108,082)
Pollution control bonds (53,950) - -
Other long-term debt (57,316) (56,748) (32,500)
Interim obligations, net 30,000 (15,000) 15,000
Payment of preferred stock dividends (40,105) (35,362) (32,837)
Payment of common stock dividends (217,300) (212,700) (201,100)
Miscellaneous (4,576) (5,581) (2,581)
- - ------------------------------------------------------------------------------------------------------------------------------
Net cash provided from (used for) financing activities (315,021) 21,679 (53,882)
- - ------------------------------------------------------------------------------------------------------------------------------
Net Change in Cash 1,722 (6,562) (20,826)
Cash at Beginning of Year 1,517 8,079 28,905
- - ------------------------------------------------------------------------------------------------------------------------------
Cash at End of Year $ 3,239 $ 1,517 $ 8,079
==============================================================================================================================
( ) Denotes use of cash.
</TABLE>
II-86B
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS
Alabama Power Company
==============================================================================================================
For the Years Ended December 31, 1986 1985
- - --------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C>
Operating Activities:
Net income $ 307,481 $ 305,908
Adjustments to reconcile net income to net
cash provided by operating activities --
Depreciation and amortization 292,569 266,657
Deferred income taxes, net 135,364 104,259
Deferred investment tax credits, net 19,736 57,096
Allowance for equity funds used during construction (27,455) (32,985)
Non-cash proceeds from settlement of disputed contracts - -
Other, net 4,251 (18,971)
Changes in certain current assets and liabilities --
Receivables, net 15,238 (13,531)
Inventories (2,040) 29,823
Payables (56,720) 26,360
Taxes accrued (1,487) (6,325)
Energy cost recovery, retail - -
Other (35,293) 4,358
- - --------------------------------------------------------------------------------------------------------------
Net cash provided from operating activities 651,644 722,649
- - --------------------------------------------------------------------------------------------------------------
Investing Activities:
Gross property additions (553,767) (568,073)
Sales of property - -
Other 10,115 22,028
- - --------------------------------------------------------------------------------------------------------------
Net cash used for investing activities (543,652) (546,045)
- - --------------------------------------------------------------------------------------------------------------
Financing Activities and Capital Contributions:
Proceeds:
Preferred stock - -
First mortgage bonds 125,000 -
Pollution control bonds 26,232 115,577
Other long-term debt 95,017 12,998
Capital contributions from parent company - 27,000
Prepaid capacity revenues 100,000 -
Retirements:
Preferred stock (42,224) -
First mortgage bonds (405,765) (39,460)
Pollution control bonds (21,000) -
Other long-term debt (43,561) (35,023)
Interim obligations, net - -
Payment of preferred stock dividends (36,014) (41,566)
Payment of common stock dividends (191,300) (185,700)
Miscellaneous (38,052) (4,438)
- - --------------------------------------------------------------------------------------------------------------
Net cash provided from (used for) financing activities (431,667) (150,612)
- - --------------------------------------------------------------------------------------------------------------
Net Change in Cash (323,675) 25,992
Cash at Beginning of Year 352,580 326,588
- - --------------------------------------------------------------------------------------------------------------
Cash at End of Year $ 28,905 $ 352,580
==============================================================================================================
( ) Denotes use of cash.
</TABLE>
II-86C
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
Alabama Power Company
=======================================================================================================================
At December 31, 1995* 1994* 1993*
- - -----------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
ASSETS
Electric Plant:
Production-
Fossil $ 3,221,250 $ 3,027,956 $ 2,987,010
Nuclear 1,874,111 1,866,750 1,860,842
Hydro 834,790 836,256 819,848
- - -----------------------------------------------------------------------------------------------------------------------
Total production 5,930,151 5,730,962 5,667,700
Transmission 1,132,336 1,087,452 1,051,130
Distribution 2,522,051 2,366,477 2,206,834
General 825,417 847,111 810,551
Construction work in progress 362,722 317,745 225,743
Nuclear fuel, at amortized cost 100,537 101,630 93,551
- - -----------------------------------------------------------------------------------------------------------------------
Total electric plant 10,873,214 10,451,377 10,055,509
- - -----------------------------------------------------------------------------------------------------------------------
Steam Heat Plant:
Plant in service 20,837 20,770 20,926
Construction work in progress 46 34 43
- - -----------------------------------------------------------------------------------------------------------------------
Total steam heat plant 20,883 20,804 20,969
- - -----------------------------------------------------------------------------------------------------------------------
Total utility plant 10,894,097 10,472,181 10,076,478
- - -----------------------------------------------------------------------------------------------------------------------
Accumulated Provision for Depreciation:
Electric 3,827,123 3,588,363 3,374,310
Steam heat 10,970 10,241 9,846
- - -----------------------------------------------------------------------------------------------------------------------
Total accumulated provision for depreciation 3,838,093 3,598,604 3,384,156
- - -----------------------------------------------------------------------------------------------------------------------
Total 7,056,004 6,873,577 6,692,322
Less property-related accumulated deferred income taxes - - -
- - -----------------------------------------------------------------------------------------------------------------------
Total 7,056,004 6,873,577 6,692,322
- - -----------------------------------------------------------------------------------------------------------------------
Other Property and Investments:
Securities received from settlement of disputed contracts - - -
Nuclear decommissioning trusts 108,368 71,014 49,550
Miscellaneous 46,388 43,955 49,635
- - -----------------------------------------------------------------------------------------------------------------------
Total 154,756 114,969 99,185
- - -----------------------------------------------------------------------------------------------------------------------
Current Assets:
Cash and cash equivalents 12,616 14,676 3,233
Investment securities - - -
Receivables, net 427,157 374,125 410,422
Fossil fuel stock, at average cost 106,627 119,555 88,481
Materials and supplies, at average cost 179,103 184,600 176,728
Prepayments 116,331 103,550 79,207
Vacation pay deferred 29,458 20,442 22,680
- - -----------------------------------------------------------------------------------------------------------------------
Total 871,292 816,948 780,751
- - -----------------------------------------------------------------------------------------------------------------------
Deferred Charges:
Deferred charges related to income taxes 436,837 451,886 469,010
Debt expense, being amortized 7,648 7,370 7,064
Premium on reacquired debt, being amortized 89,967 101,851 102,634
Uranium enrichment decontamination and decommissioning fund 40,282 42,996 45,554
Miscellaneous 87,574 49,620 52,163
- - -----------------------------------------------------------------------------------------------------------------------
Total 662,308 653,723 676,425
- - -----------------------------------------------------------------------------------------------------------------------
Total Assets $ 8,744,360 $ 8,459,217 $ 8,248,683
=======================================================================================================================
*Includes the effect of recognizing, beginning in 1987, retail service rendered
but not yet billed to customers.
</TABLE>
II-87
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
Alabama Power Company
============================================================================================================================
At December 31, 1992* 1991* 1990*
- - ----------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
ASSETS
Electric Plant:
Production-
Fossil $ 2,953,683 $ 2,991,876 $ 2,462,100
Nuclear 1,860,832 1,851,317 1,794,540
Hydro 818,363 814,301 809,578
- - ----------------------------------------------------------------------------------------------------------------------------
Total production 5,632,878 5,657,494 5,066,218
Transmission 1,013,464 977,239 925,368
Distribution 2,072,165 1,947,972 1,815,265
General 751,652 713,948 660,217
Construction work in progress 164,555 148,564 654,055
Nuclear fuel, at amortized cost 101,128 109,259 143,711
- - ----------------------------------------------------------------------------------------------------------------------------
Total electric plant 9,735,842 9,554,476 9,264,834
- - ----------------------------------------------------------------------------------------------------------------------------
Steam Heat Plant:
Plant in service 20,924 20,214 20,091
Construction work in progress 33 181 74
- - ----------------------------------------------------------------------------------------------------------------------------
Total steam heat plant 20,957 20,395 20,165
- - ----------------------------------------------------------------------------------------------------------------------------
Total utility plant 9,756,799 9,574,871 9,284,999
- - ----------------------------------------------------------------------------------------------------------------------------
Accumulated Provision for Depreciation:
Electric 3,122,332 2,913,385 2,676,957
Steam heat 9,211 8,492 7,861
- - ----------------------------------------------------------------------------------------------------------------------------
Total accumulated provision for depreciation 3,131,543 2,921,877 2,684,818
- - ----------------------------------------------------------------------------------------------------------------------------
Total 6,625,256 6,652,994 6,600,181
Less property-related accumulated deferred income taxes 1,170,982 1,140,303 1,106,664
- - ----------------------------------------------------------------------------------------------------------------------------
Total 5,454,274 5,512,691 5,493,517
- - ----------------------------------------------------------------------------------------------------------------------------
Other Property and Investments:
Securities received from settlement of disputed contracts - 69,550 -
Nuclear decommissioning trusts 32,390 15,864 -
Miscellaneous 49,892 48,254 40,604
- - ----------------------------------------------------------------------------------------------------------------------------
Total 82,282 133,668 40,604
- - ----------------------------------------------------------------------------------------------------------------------------
Current Assets:
Cash and cash equivalents 13,629 11,160 10,560
Investment securities 64,832 - -
Receivables, net 344,934 349,599 346,473
Fossil fuel stock, at average cost 134,328 154,798 144,960
Materials and supplies, at average cost 182,511 174,745 167,209
Prepayments 108,254 95,832 50,364
Vacation pay deferred 21,879 21,691 22,845
- - ----------------------------------------------------------------------------------------------------------------------------
Total 870,367 807,825 742,411
- - ----------------------------------------------------------------------------------------------------------------------------
Deferred Charges:
Deferred charges related to income taxes - - -
Debt expense, being amortized 6,118 5,957 6,083
Premium on reacquired debt, being amortized 74,835 40,174 26,504
Uranium enrichment decontamination and decommissioning fund 47,730 - -
Miscellaneous 58,012 49,147 53,174
- - ----------------------------------------------------------------------------------------------------------------------------
Total 186,695 95,278 85,761
- - ----------------------------------------------------------------------------------------------------------------------------
Total Assets $ 6,593,618 $ 6,549,462 $ 6,362,293
============================================================================================================================
*Includes the effect of recognizing, beginning in 1987, retail service rendered
but not yet billed to customers.
</TABLE>
II-88A
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
Alabama Power Company
============================================================================================================================
At December 31, 1989* 1988* 1987*
- - ----------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
ASSETS
Electric Plant:
Production-
Fossil $ 2,428,146 $ 1,820,966 $ 1,787,979
Nuclear 1,786,877 1,769,093 1,765,854
Hydro 803,901 789,617 788,046
- - ----------------------------------------------------------------------------------------------------------------------------
Total production 5,018,924 4,379,676 4,341,879
Transmission 882,933 844,003 817,065
Distribution 1,692,426 1,587,690 1,481,845
General 646,523 613,498 535,148
Construction work in progress 557,150 1,023,019 750,907
Nuclear fuel, at amortized cost 147,997 174,130 191,493
- - ----------------------------------------------------------------------------------------------------------------------------
Total electric plant 8,945,953 8,622,016 8,118,337
- - ----------------------------------------------------------------------------------------------------------------------------
Steam Heat Plant:
Plant in service 20,083 20,076 20,217
Construction work in progress 71 58 89
- - ----------------------------------------------------------------------------------------------------------------------------
Total steam heat plant 20,154 20,134 20,306
- - ----------------------------------------------------------------------------------------------------------------------------
Total utility plant 8,966,107 8,642,150 8,138,643
- - ----------------------------------------------------------------------------------------------------------------------------
Accumulated Provision for Depreciation:
Electric 2,458,747 2,257,696 2,068,176
Steam heat 7,154 6,456 5,938
- - ----------------------------------------------------------------------------------------------------------------------------
Total accumulated provision for depreciation 2,465,901 2,264,152 2,074,114
- - ----------------------------------------------------------------------------------------------------------------------------
Total 6,500,206 6,377,998 6,064,529
Less property-related accumulated deferred income taxes 1,051,877 1,001,173 933,932
- - ----------------------------------------------------------------------------------------------------------------------------
Total 5,448,329 5,376,825 5,130,597
- - ----------------------------------------------------------------------------------------------------------------------------
Other Property and Investments:
Securities received from settlement of disputed contracts - - -
Nuclear decommissioning trusts - - -
Miscellaneous 34,710 29,677 31,402
- - ----------------------------------------------------------------------------------------------------------------------------
Total 34,710 29,677 31,402
- - ----------------------------------------------------------------------------------------------------------------------------
Current Assets:
Cash and cash equivalents 3,239 1,517 8,079
Investment securities - - -
Receivables, net 355,107 344,671 353,493
Fossil fuel stock, at average cost 131,942 173,858 164,671
Materials and supplies, at average cost 139,326 117,818 103,823
Prepayments 54,613 28,412 10,595
Vacation pay deferred 22,021 21,871 21,317
- - ----------------------------------------------------------------------------------------------------------------------------
Total 706,248 688,147 661,978
- - ----------------------------------------------------------------------------------------------------------------------------
Deferred Charges:
Deferred charges related to income taxes - - -
Debt expense, being amortized 6,491 6,831 6,695
Premium on reacquired debt, being amortized 28,778 27,329 30,767
Uranium enrichment decontamination and decommissioning fund - - -
Miscellaneous 54,875 52,136 50,561
- - ----------------------------------------------------------------------------------------------------------------------------
Total 90,144 86,296 88,023
- - ----------------------------------------------------------------------------------------------------------------------------
Total Assets $ 6,279,431 $ 6,180,945 $ 5,912,000
============================================================================================================================
*Includes the effect of recognizing, beginning in 1987, retail service rendered
but not yet billed to customers.
</TABLE>
II-88B
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
Alabama Power Company
=============================================================================================================
At December 31, 1986 1985
- - -------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C>
ASSETS
Electric Plant:
Production-
Fossil $ 1,748,226 $ 1,678,117
Nuclear 1,749,981 1,687,766
Hydro 784,445 773,682
- - -------------------------------------------------------------------------------------------------------------
Total production 4,282,652 4,139,565
Transmission 773,142 699,980
Distribution 1,384,576 1,295,930
General 506,228 349,249
Construction work in progress 497,491 502,455
Nuclear fuel, at amortized cost 205,768 243,468
- - -------------------------------------------------------------------------------------------------------------
Total electric plant 7,649,857 7,230,647
- - -------------------------------------------------------------------------------------------------------------
Steam Heat Plant:
Plant in service 19,508 17,056
Construction work in progress 123 64
- - -------------------------------------------------------------------------------------------------------------
Total steam heat plant 19,631 17,120
- - -------------------------------------------------------------------------------------------------------------
Total utility plant 7,669,488 7,247,767
- - -------------------------------------------------------------------------------------------------------------
Accumulated Provision for Depreciation:
Electric 1,877,124 1,697,547
Steam heat 5,261 3,874
- - -------------------------------------------------------------------------------------------------------------
Total accumulated provision for depreciation 1,882,385 1,701,421
- - -------------------------------------------------------------------------------------------------------------
Total 5,787,103 5,546,346
Less property-related accumulated deferred income taxes 857,081 758,150
- - -------------------------------------------------------------------------------------------------------------
Total 4,930,022 4,788,196
- - -------------------------------------------------------------------------------------------------------------
Other Property and Investments:
Securities received from settlement of disputed contracts - -
Nuclear decommissioning trusts - -
Miscellaneous 30,735 24,849
- - -------------------------------------------------------------------------------------------------------------
Total 30,735 24,849
- - -------------------------------------------------------------------------------------------------------------
Current Assets:
Cash and cash equivalents 28,905 352,580
Investment securities - -
Receivables, net 220,025 235,263
Fossil fuel stock, at average cost 152,640 163,899
Materials and supplies, at average cost 89,599 76,300
Prepayments 12,320 9,741
Vacation pay deferred 20,002 18,859
- - -------------------------------------------------------------------------------------------------------------
Total 523,491 856,642
- - -------------------------------------------------------------------------------------------------------------
Deferred Charges:
Deferred charges related to income taxes - -
Debt expense, being amortized 6,308 6,607
Premium on reacquired debt, being amortized 34,170 524
Uranium enrichment decontamination and decommissioning fund - -
Miscellaneous 45,927 45,445
- - -------------------------------------------------------------------------------------------------------------
Total 86,405 52,576
- - -------------------------------------------------------------------------------------------------------------
Total Assets $ 5,570,653 $ 5,722,263
=============================================================================================================
</TABLE>
II-88C
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
Alabama Power Company
=========================================================================================================================
At December 31, 1995* 1994* 1993*
- - -------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock $ 224,358 $ 224,358 $ 224,358
Paid-in capital 1,304,645 1,304,645 1,304,645
Premium on preferred stock 146 146 146
Earnings retained in the business 1,161,225 1,085,256 997,199
- - -------------------------------------------------------------------------------------------------------------------------
Total common equity 2,690,374 2,614,405 2,526,348
Preferred stock 440,400 440,400 440,400
Preferred stock subject to mandatory redemption - - -
Long-term debt 2,374,948 2,455,013 2,362,852
- - -------------------------------------------------------------------------------------------------------------------------
Total (excluding amount due within one year) 5,505,722 5,509,818 5,329,600
- - -------------------------------------------------------------------------------------------------------------------------
Current Liabilities:
Notes payable to banks - - 40,000
Commercial paper 390,016 179,882 -
Preferred stock due within one year - - -
Long-term debt due within one year 84,682 796 58,998
Accounts payable 258,727 318,991 334,998
Customer deposits 30,353 30,245 31,198
Taxes accrued 31,757 22,437 40,144
Interest accrued 53,527 52,516 52,809
Vacation pay accrued 29,458 20,442 22,680
Miscellaneous 70,543 57,047 50,426
- - -------------------------------------------------------------------------------------------------------------------------
Total 949,063 682,356 631,253
- - -------------------------------------------------------------------------------------------------------------------------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 1,191,591 1,181,342 1,165,127
Accumulated deferred investment tax credits 305,372 317,018 329,909
Prepaid capacity revenues, net 131,186 138,421 143,762
Deferred revenues from settlement of disputed contracts - - 19,871
Uranium enrichment decontamination and decommissioning fund 36,620 39,413 39,644
Deferred credits related to income taxes 386,038 405,256 440,945
Natural disaster reserve 17,959 28,750 -
Miscellaneous 220,809 156,843 148,572
- - -------------------------------------------------------------------------------------------------------------------------
Total 2,289,575 2,267,043 2,287,830
- - -------------------------------------------------------------------------------------------------------------------------
Total Capitalization and Liabilities $ 8,744,360 $ 8,459,217 $ 8,248,683
=========================================================================================================================
*Includes the effect of recognizing, beginning in 1987, retail service rendered
but not yet billed to customers.
</TABLE>
II-89
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
Alabama Power Company
============================================================================================================================
At December 31, 1992* 1991* 1990*
- - ----------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock $ 224,358 $ 224,358 $ 224,358
Paid-in capital 1,304,645 1,304,645 1,304,645
Premium on preferred stock 342 461 461
Earnings retained in the business 914,148 857,734 751,126
- - ----------------------------------------------------------------------------------------------------------------------------
Total common equity 2,443,493 2,387,198 2,280,590
Preferred stock 489,400 484,400 484,400
Preferred stock subject to mandatory redemption - - 12,500
Long-term debt 2,202,473 2,382,635 2,397,931
- - ----------------------------------------------------------------------------------------------------------------------------
Total (excluding amount due within one year) 5,135,366 5,254,233 5,175,421
- - ----------------------------------------------------------------------------------------------------------------------------
Current Liabilities:
Notes payable to banks 71,000 76,000 89,500
Commercial paper 125,917 - -
Preferred stock due within one year - - 5,000
Long-term debt due within one year 67,379 85,077 83,989
Accounts payable 296,731 295,333 271,776
Customer deposits 31,286 30,165 29,571
Taxes accrued 24,373 45,493 20,665
Interest accrued 41,675 49,288 49,820
Vacation pay accrued 21,879 21,691 22,845
Miscellaneous 93,836 37,699 64,547
- - ----------------------------------------------------------------------------------------------------------------------------
Total 774,076 640,746 637,713
- - ----------------------------------------------------------------------------------------------------------------------------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes - - -
Accumulated deferred investment tax credits 344,707 362,672 379,990
Prepaid capacity revenues, net 147,658 149,534 99,835
Deferred revenues from settlement of disputed contracts 46,721 59,937 -
Uranium enrichment decontamination and decommissioning fund 44,548 - -
Deferred credits related to income taxes - - -
Natural disaster reserve - - -
Miscellaneous 100,542 82,340 69,334
- - ----------------------------------------------------------------------------------------------------------------------------
Total 684,176 654,483 549,159
- - ----------------------------------------------------------------------------------------------------------------------------
Total Capitalization and Liabilities $ 6,593,618 $ 6,549,462 $ 6,362,293
============================================================================================================================
*Includes the effect of recognizing, beginning in 1987, retail service rendered
but not yet billed to customers.
</TABLE>
II-90A
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
Alabama Power Company
============================================================================================================================
At December 31, 1989* 1988* 1987*
- - ----------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock $ 224,358 $ 224,358 $ 224,358
Paid-in capital 1,304,645 1,304,645 1,225,145
Premium on preferred stock 461 461 461
Earnings retained in the business 659,347 565,351 496,783
- - ----------------------------------------------------------------------------------------------------------------------------
Total common equity 2,188,811 2,094,815 1,946,747
Preferred stock 484,400 484,400 384,400
Preferred stock subject to mandatory redemption 17,500 22,500 27,500
Long-term debt 2,435,129 2,496,492 2,386,258
- - ----------------------------------------------------------------------------------------------------------------------------
Total (excluding amount due within one year) 5,125,840 5,098,207 4,744,905
- - ----------------------------------------------------------------------------------------------------------------------------
Current Liabilities:
Notes payable to banks 30,000 - 15,000
Commercial paper - - -
Preferred stock due within one year 5,000 5,000 2,500
Long-term debt due within one year 81,031 96,242 95,140
Accounts payable 267,645 259,443 273,613
Customer deposits 28,450 25,964 32,220
Taxes accrued 26,832 25,285 72,118
Interest accrued 49,926 50,174 49,489
Vacation pay accrued 22,021 21,871 21,317
Miscellaneous 91,022 28,944 24,660
- - ----------------------------------------------------------------------------------------------------------------------------
Total 601,927 512,923 586,057
- - ----------------------------------------------------------------------------------------------------------------------------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes - - -
Accumulated deferred investment tax credits 399,097 412,771 418,370
Prepaid capacity revenues, net 102,346 104,211 103,947
Deferred revenues from settlement of disputed contracts - - -
Uranium enrichment decontamination and decommissioning fund - - -
Deferred credits related to income taxes - - -
Natural disaster reserve - - -
Miscellaneous 50,221 52,833 58,721
- - ----------------------------------------------------------------------------------------------------------------------------
Total 551,664 569,815 581,038
- - ----------------------------------------------------------------------------------------------------------------------------
Total Capitalization and Liabilities $ 6,279,431 $ 6,180,945 $ 5,912,000
============================================================================================================================
*Includes the effect of recognizing, beginning in 1987, retail service rendered
but not yet billed to customers.
</TABLE>
II-90B
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
Alabama Power Company
=============================================================================================================
At December 31, 1986 1985
- - -------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C>
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock $ 224,358 $ 224,358
Paid-in capital 1,182,145 1,182,145
Premium on preferred stock 461 1,937
Earnings retained in the business 440,644 361,716
- - -------------------------------------------------------------------------------------------------------------
Total common equity 1,847,608 1,770,156
Preferred stock 384,400 384,400
Preferred stock subject to mandatory redemption 30,000 35,000
Long-term debt 2,210,108 2,349,373
- - -------------------------------------------------------------------------------------------------------------
Total (excluding amount due within one year) 4,472,116 4,538,929
- - -------------------------------------------------------------------------------------------------------------
Current Liabilities:
Notes payable to banks - -
Commercial paper - -
Preferred stock due within one year 5,000 42,224
Long-term debt due within one year 142,394 224,918
Accounts payable 238,606 295,326
Customer deposits 30,333 29,436
Taxes accrued 50,757 27,368
Interest accrued 47,648 66,193
Vacation pay accrued 20,002 18,859
Miscellaneous 25,567 42,622
- - -------------------------------------------------------------------------------------------------------------
Total 560,307 746,946
- - -------------------------------------------------------------------------------------------------------------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes - -
Accumulated deferred investment tax credits 418,275 418,222
Prepaid capacity revenues, net 101,143 -
Deferred revenues from settlement of disputed contracts - -
Uranium enrichment decontamination and decommissioning fund - -
Deferred credits related to income taxes - -
Natural disaster reserve - -
Miscellaneous 18,812 18,166
- - -------------------------------------------------------------------------------------------------------------
Total 538,230 436,388
- - -------------------------------------------------------------------------------------------------------------
Total Capitalization and Liabilities $ 5,570,653 $ 5,722,263
=============================================================================================================
</TABLE>
II-90C
<PAGE>
ALABAMA POWER COMPANY
OUTSTANDING SECURITIES AT DECEMBER 31, 1995
First Mortgage Bonds
Amount Interest Amount
Series Issued Rate Outstanding Maturity
- - --------------------------------------------------------------------------------
(Thousands) (Thousands)
1993 $ 60,000 4-1/2% $ 60,000 3/1/96
1993 50,000 5-1/2% 50,000 2/1/98
1992 170,000 6-3/8% 170,000 8/1/99
1993 100,000 6% 100,000 3/1/00
1992 100,000 6.85% 100,000 8/1/02
1993 125,000 7% 125,000 1/1/03
1993 175,000 6-3/4% 175,000 2/1/03
1992 175,000 7-1/4% 175,000 8/1/07
1991 100,000 9-1/4% 98,748 5/1/21
1991 150,000 8-3/4% 148,500 12/1/21
1992 200,000 8-1/2% 198,000 5/1/22
1992 100,000 8.30% 99,608 7/1/22
1993 100,000 7-3/4% 100,000 2/1/23
1993 150,000 7.45% 150,000 7/1/23
1993 100,000 7.30% 100,000 11/1/23
1994 150,000 9% 150,000 12/1/24
============= ==============
$ 2,005,000 $ 1,999,856
============= ==============
Pollution Control Bonds
Amount Interest Amount
Series Issued Rate Outstanding Maturity
- - --------------------------------------------------------------------------------
(Thousands) (Thousands)
1978 $ 5,600 7-1/4% $ 1,000 5/1/03
1986 21,000 7.40% 21,000 11/1/16
1993 12,100 Variable 12,100 8/1/17
1993 12,000 Variable 12,000 8/1/17
1993 12,000 Variable 12,000 8/1/17
1993 96,990 6.05% 96,990 5/1/23
1993 9,800 5.80% 9,800 6/1/22
1994 24,400 5-1/2% 24,400 1/1/24
1994 53,700 Variable 53,700 6/1/15
1994 101,650 6-1/2% 101,650 9/1/23
1995 50,000 Variable 50,000 5/1/22
1995 81,500 Variable 81,500 10/1/22
============= ==============
$ 480,740 $ 476,140
============= ==============
Preferred Stock
Shares Dividend Amount
Series Outstanding Rate Outstanding
- - ---------------------------------------------------------------
(Thousands)
1946-1952 364,000 4.20% $ 36,400
1950 100,000 4.60% 10,000
1961 80,000 4.92% 8,000
1963 50,000 4.52% 5,000
1964 60,000 4.64% 6,000
1965 50,000 4.72% 5,000
1966 70,000 5.96% 7,000
1968 50,000 6.88% 5,000
1988 500,000 Auction 50,000
1992 4,000,000 7.60% 100,000
1992 2,000,000 7.60% 50,000
1993 1,520,000 6.80% 38,000
1993 2,000,000 6.40% 50,000
1993 200 Auction 20,000
1993 2,000,000 Adjustable 50,000
============= ==============
$ 12,844,200 $ 440,400
============= ==============
II-91
<PAGE>
ALABAMA POWER COMPANY
SECURITIES RETIRED DURING 1995
Pollution Control Bonds
Principal Interest
Series Amount Rate
- - --------------------------------------------------------------------------------
(Thousands)
1985 $ 50,000 9-3/8%
1985 81,500 9-1/4%
===========
$ 131,500
===========
II-92
<PAGE>
GEORGIA POWER COMPANY
FINANCIAL SECTION
II-93
<PAGE>
MANAGEMENT'S REPORT
Georgia Power Company 1995 Annual Report
The management of Georgia Power Company has prepared this annual report and is
responsible for the financial statements and related information. These
statements were prepared in accordance with generally accepted accounting
principles appropriate in the circumstances, and necessarily include amounts
that are based on the best estimates and judgments of management. Financial
information throughout this annual report is consistent with the financial
statements.
The Company maintains a system of internal accounting controls to provide
reasonable assurance that assets are safeguarded and that the books and records
reflect only authorized transactions of the Company. Limitations exist in any
system of internal controls based upon the recognition that the cost of the
system should not exceed its benefits. The Company believes that its system of
internal accounting controls maintains an appropriate cost/benefit relationship.
The Company's system of internal accounting controls is evaluated on an
ongoing basis by the Company's internal audit staff. The Company's independent
public accountants also consider certain elements of the internal control system
in order to determine their auditing procedures for the purpose of expressing an
opinion on the financial statements.
The audit committee of the board of directors, which is composed of six
directors who are not employees, provides a broad overview of management's
financial reporting and control functions. At least three times a year this
committee meets with management, the internal auditors, and the independent
public accountants to ensure that these groups are fulfilling their obligations
and to discuss auditing, internal control and financial reporting matters. The
internal auditors and the independent public accountants have access to the
members of the audit committee at any time.
Management believes that its policies and procedures provide reasonable
assurance that the Company's operations are conducted with a high standard of
business ethics.
In management's opinion, the financial statements present fairly, in all
material respects, the financial position, results of operations and cash flows
of Georgia Power Company in conformity with generally accepted accounting
principles.
/s/ H. Allen Franklin
H. Allen Franklin
President and Chief
Executive Officer
/s/ Warren Y. Jobe
Warren Y. Jobe
Executive Vice President, Treasurer and
Chief Financial Officer
February 21, 1996
II-94
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors
of Georgia Power Company:
We have audited the accompanying balance sheets and statements of capitalization
of Georgia Power Company (a Georgia corporation and wholly owned subsidiary of
The Southern Company) as of December 31, 1995 and 1994, and the related
statements of income, retained earnings, paid-in capital, and cash flows for
each of the three years in the period ended December 31, 1995. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements (pages II-104 through II-125)
referred to above present fairly, in all material respects, the financial
position of Georgia Power Company as of December 31, 1995 and 1994, and the
results of its operations and its cash flows for the periods stated, in
conformity with generally accepted accounting principles.
/s/ Arthur Andersen LLP
Atlanta, Georgia
February 21, 1996
II-95
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION
Georgia Power Company 1995 Annual Report
RESULTS OF OPERATIONS
Earnings
Georgia Power Company's 1995 earnings totaled $609 million, representing an $83
million (15.9 percent) increase over 1994. Earnings for 1994 were reduced by a
$55 million after-tax charge related to work force reduction programs. Excluding
the charge related to the 1994 work force reduction programs, earnings for 1995
increased 4.8 percent over 1994 primarily due to higher retail energy sales and
lower interest charges, partially offset by higher operating expenses. Earnings
for 1994 declined from the prior year not only because of the work force
reduction charge but also because of lower retail energy sales due to mild
weather. The summer of 1993 was exceptionally hot in comparison.
Revenues
The following table summarizes the factors impacting operating revenues for the
1993-1995 period:
Increase (Decrease)
From Prior Year
-----------------------------------
1995 1994 1993
-----------------------------------
Retail - (in millions)
Sales growth $110 $ 67 $ 45
Weather 69 (128) 126
Fuel cost recovery 66 (35) 76
Demand-side programs 36 (12) 15
-----------------------------------------------------------------
Total retail 281 (108) 262
- - ------------------------------------------------------------------
Sales for resale -
Non-affiliates (61) (183) (106)
Affiliates 16 (1) (6)
- - ------------------------------------------------------------------
Total sales for resale (45) (184) (112)
- - ------------------------------------------------------------------
Other operating revenues 7 3 4
- - ------------------------------------------------------------------
Total operating revenues $243 ($289) $154
- - ------------------------------------------------------------------
Percent change 5.8% (6.5)% 3.6%
- - ------------------------------------------------------------------
Retail revenues of $4.0 billion in 1995 increased $281 million (7.6 percent)
over the prior year, compared with a decrease of $108 million (2.8 percent) in
1994. Sales growth, reflecting continued expansion of Georgia's economy, and the
hot summer of 1995, compared to the milder-than-normal weather during the summer
of 1994, were the primary reasons for the increase in retail revenues. Retail
revenues were down in 1994 from the prior year primarily due to hot summer
weather in 1993.
Fuel revenues generally represent the direct recovery of fuel expense,
including the fuel component of purchased energy, and do not affect net income.
Revenues from demand-side option programs generally represent the direct
recovery of program costs. See Note 3 to the financial statements under
"Demand-Side Conservation Programs" for further information on these programs.
Revenues from sales to non-affiliated utilities decreased in both 1995 and
1994. Revenues from sales to non-affiliated utilities outside the service area
under long-term contracts consist of capacity and energy components. Capacity
revenues reflect the recovery of fixed costs and a return on investment under
the contracts. Energy is generally sold at variable cost. The capacity and
energy components were as follows:
1995 1994 1993
-------------------------------
(in millions)
Capacity $53 $ 84 $152
Energy 45 82 113
- - --------------------------------------------------------------
Total $98 $166 $265
==============================================================
Contractual unit power sales to Florida utilities for 1995 and 1994 are down
primarily due to scheduled reductions that corresponded with the sales to these
utilities of portions of Plant Scherer Unit 4 in June 1995 and June 1994. The
amount of capacity under these contracts declined by 155 megawatts and 427
megawatts in 1995 and 1994, respectively. In 1996, the contracted capacity will
decline another 75 megawatts.
Sales to municipalities and cooperatives in Georgia increased in 1995 due to
higher summer demand resulting from the hot weather; however, such sales
decreased in 1994 as these customers retained more of their own generation at
jointly owned facilities, and as a result of a new agreement with territorial
wholesale customers.
Revenues from sales to affiliated companies within the Southern electric
system will vary from year to year depending on demand and the availability and
cost of generating resources at each company. Sales to affiliated companies do
not have a significant impact on earnings.
II-96
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Georgia Power Company 1995 Annual Report
Kilowatt-hour (KWH) sales for 1995 and the percent change by year were as
follows:
Percent Change
----------------------------
1995
KWH 1995 1994 1993
----------------------------------------
(in billions)
Residential 17.3 10.4% (5.8)% 11.5%
Commercial 19.8 5.9 2.5 5.9
Industrial 25.3 3.9 3.0 2.9
Other 0.5 2.0 5.0 5.7
-------
Total retail 62.9 6.2 0.4 6.1
-------
Sales for resale -
Non-affiliates 6.6 (17.3) (44.3) (9.8)
Affiliates 2.8 (10.4) 0.9 (8.8)
-------
Total sales for resale 9.4 (15.4) (36.4) (9.7)
-------
Total sales 72.3 2.8 (8.0) 2.1
=======
- - -----------------------------------------------------------------
Residential, commercial and industrial energy sales growth in 1995 reflected
continued expansion of Georgia's economy, hot summer weather, and an increase in
customers served. The 1994 sales decline in the residential class was primarily
the result of milder-than-normal summer weather in 1994. However in 1994,
industrial and commercial sales were positively impacted by continued
improvement in economic conditions. Assuming normal weather, sales to retail
customers are projected to grow approximately 2 percent annually on average
during 1996 through 1998.
Expenses
Fuel costs constitute the single largest expense for the Company. The mix of
fuel sources for generation of electricity is determined primarily by system
load, the unit cost of fuel consumed, and the availability of hydro and nuclear
generating units. The amount and sources of generation and the average cost of
fuel per net kilowatt-hour generated were as follows:
1995 1994 1993
---------------------------
Total generation
(billions of kilowatt-hours) 64 62 64
Sources of generation
(percent) --
Coal 73.7 74.8 76.9
Nuclear 22.6 21.9 20.0
Hydro 3.0 3.1 2.8
Oil and gas 0.7 0.2 0.3
Average cost of fuel per net
kilowatt-hour generated
(cents) --
Coal 1.67 1.67 1.75
Nuclear 0.60 0.63 0.58
Oil and gas * * *
Total 1.44 1.44 1.52
- - ---------------------------------------------------------------
* Not meaningful because of minimal generation from
fuel source.
Fuel expense increased 3.5 percent in 1995 because of higher generation
which stemmed from greater demand. Fuel expense decreased 8.5 percent in 1994
due to lower fuel costs, lower generation, and the displacement of coal-fired
generation with lower cost nuclear generation.
Purchased power expense has decreased significantly since 1993, reflecting
declining contractual capacity purchases from the co-owners of Plant Vogtle.
Purchased power expense decreased $36 million in 1995 and $156 million in 1994.
The declines in 1995 and 1994 also resulted from decreased purchases from
affiliated companies, and in 1994 from decreased energy purchases from
territorial wholesale customers. The declines in Plant Vogtle contractual
capacity purchases did not have a significant impact on earnings in 1995 and
1994 since these costs are being levelized over six years under the terms of the
1991 Georgia Public Service Commission
II-97
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Georgia Power Company 1995 Annual Report
(GPSC) retail rate order. The levelization is reflected in the amortization of
deferred Plant Vogtle costs in the Statements of Income. See Note 3 to the
financial statements under "Plant Vogtle Phase-In Plans" for additional
information.
The Company has incurred expenses for separation benefits associated with
its work force reduction programs. These expenses were $11 million in 1995 and
$82 million in 1994.
Other operation and maintenance (O&M) expenses increased 12.2 percent in
1995 primarily as a result of the recognition of costs associated with
demand-side option programs and increased maintenance expenses. The demand-side
option program costs were offset in part by increases in retail revenues. During
1995, the Company expensed an additional $58 million of demand-side option
program and other related costs, as compared to 1994, of which approximately $29
million was not collected through rate riders. See Note 3 to the financial
statements under "Demand-Side Conservation Programs" for additional information
on the recovery of these program costs. Other O&M expenses decreased 4.5 percent
in 1994 primarily due to environmental remediation costs at various sites of $32
million in 1993 compared to $8 million in 1994; recognition in 1993 of the
one-time cost of an automotive fleet reduction program; and lower maintenance
and pension costs during 1994.
Depreciation and amortization increased $43 million in 1995 primarily due to
additional plant investment, accelerated amortization of software costs, and an
increase in nuclear decommissioning expenses.
Taxes other than income taxes increased 5.2 percent in 1995 and 1.0 percent
in 1994, reflecting primarily higher ad valorem taxes and in 1995, higher
franchise taxes paid to municipalities as a result of increased sales.
Income tax expense fluctuates directly with earnings.
Other income (expense), net decreased in 1995 primarily due to an increase
in charitable contributions.
Interest expense decreased $51 million (14.6 percent) and $61 million (14.7
percent) in 1995 and 1994, respectively, due primarily to refinancing of
long-term debt. The Company refinanced $505 million and $510 million of
securities in 1995 and 1994, respectively. The Company also retired $264 million
of long-term debt with the proceeds from the 1995 and 1994 Plant Scherer Unit 4
sales. Other interest charges in 1993 include interest related to the settlement
of an Internal Revenue Service (IRS) audit.
The settlement had no effect on 1993 net income.
The Company has deferred certain expenses and recorded a deferred return
related to Plant Vogtle under phase-in plans. See Note 3 to the financial
statements under "Plant Vogtle Phase-In Plans" for information regarding the
deferral and subsequent amortization of costs related to Plant Vogtle.
Effects of Inflation
The Company is subject to rate regulation and income tax laws that are based on
the recovery of historical costs. Therefore, inflation creates an economic loss
because the Company is recovering its costs of investments in dollars that have
less purchasing power. While the inflation rate has been relatively low in
recent years, it continues to have an adverse effect on the Company because of
the large investment in long-lived utility plant. Conventional accounting for
historical cost does not recognize either this economic loss or the partially
offsetting gain that arises through financing facilities with fixed-money
obligations such as long-term debt and preferred stock. Any recognition of
inflation by regulatory authorities is reflected in the rate of return allowed.
Future Earnings Potential
The results of operations for the past three years are not necessarily
indicative of future earnings. The level of future earnings depends on numerous
factors including energy sales and regulatory matters.
Beginning January 1, 1996, the Company will operate under a three-year
retail rate plan. The plan, which was approved by the GPSC on February 16, 1996,
concludes a GPSC review of the Company's earnings and addresses an alternative
rate plan proposed by the Company. Under the plan, the Company's earnings will
be evaluated against a retail return on common equity range of 10 percent to
12.5 percent. Earnings in excess of 12.5 percent will be used to accelerate the
amortization of regulatory assets or depreciation of electric plant. At its
II-98
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Georgia Power Company 1995 Annual Report
option, the Company may also recognize accelerated amortization or depreciation
of assets within the allowed return on common equity range. The Company is
required to absorb cost increases of approximately $29 million annually during
the plan's three-year operation, including $14 million annually of accelerated
depreciation of electric plant. During the plan's operation, the Company will
not file for a general base rate increase unless its projected retail return on
common equity falls below 10 percent. Under the approved plan, on July 1, 1998
the Company will make a general rate case filing in response to which the GPSC
would be expected either to continue the rate plan or adopt a different one.
Growth in energy sales is subject to a number of factors which traditionally
have included: changes in contracts with neighboring utilities; energy
conservation practiced by customers; the elasticity of demand; weather;
competition; and the rate of economic growth in the Company's service area.
Assuming normal weather, retail sales growth is projected to be approximately 2
percent annually on average during 1996 through 1998.
The addition of four combustion turbine generating units and the Rocky
Mountain pumped storage hydroelectric plant in 1995 and the scheduled addition
of one jointly owned combustion turbine unit in 1996, will increase related O&M
and depreciation expenses. In addition, the Company has entered into a four-year
purchase power agreement to meet peaking needs whereby the Company will purchase
400 megawatts of capacity beginning in 1996 and declining to 200 megawatts of
capacity in 1998. Capacity payments are projected to be $6 million in 1996 and
1997 and $3 million in 1998 and 1999. The Company has also entered into a
30-year purchase power agreement whereby the Company will buy electricity during
peak periods from a planned 300 megawatt cogeneration facility starting in June
1998. Capacity and fixed O&M payments are projected to be $13 million in 1998.
Work force reduction programs implemented in 1994 and 1995 will assist in
efforts to control growth in future operating expenses.
As discussed in Note 3 to the financial statements, regulatory uncertainties
exist related to the Rocky Mountain pumped storage hydroelectric plant. In the
event the GPSC does not allow full recovery of the plant's costs, then the
portion not allowed may have to be written off. The Company's net investment in
the plant is approximately $190 million.
See Note 3 to the financial statements for information regarding proceedings
with respect to the Company's recovery of demand-side conservation program
costs.
During 1995, the Company sold its remaining interest in Unit 4 of Plant
Scherer to two Florida utilities. This transaction coincided with scheduled
reductions in capacity revenues from Florida utilities under contractual unit
power sales contracts of approximately $22 million in 1995 and an additional $7
million in 1996. See Notes 6 and 7 to the financial statements for additional
information.
During 1994 and 1995, Oglethorpe Power Corporation (OPC) gave the Company
notice of its intent to decrease its purchases of capacity under a power supply
agreement by 250 megawatts in September 1996 and an additional 250 megawatts in
September 1997. As a result, the Company's capacity revenues from OPC will
decline approximately $8 million in 1996, an additional $25 million in 1997, and
an additional $18 million in 1998.
OPC and the Municipal Electric Authority of Georgia (MEAG) have filed joint
complaints in two separate venues seeking to recover from the Company
approximately $16.5 million in alleged overcharges, plus approximately $6.3
million in interest. See Note 3 to the financial statements under "Wholesale
Litigation" for further discussion of this matter.
The Federal Energy Regulatory Commission (FERC) regulates wholesale rate
schedules and power sales contracts that the Company has with its sales for
resale customers. The FERC currently is reviewing the rate of return on common
equity included in these schedules and contracts and may require such returns to
be lowered, possibly retroactively. See Note 3 to the financial statements under
"FERC Review of Equity Returns" for additional information.
Compliance costs related to the Clean Air Act Amendments of 1990 (Clean Air
Act) could affect earnings if such costs are not fully recovered. The Clean Air
II-99
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Georgia Power Company 1995 Annual Report
Act and other environmental issues are discussed later under "Environmental
Issues."
The Energy Policy Act of 1992 (Energy Act) is beginning to have a dramatic
effect on the future of the electric utility industry. The Energy Act promotes
energy efficiency, alternative fuel use, and increased competition for electric
utilities. The Company is posturing the business to meet the challenge of this
major change in the traditional practice of selling electricity. The Energy Act
allows independent power producers (IPPs) to access a utility's transmission
network in order to sell electricity to other utilities. This enhances the
incentive for IPPs to build cogeneration plants for a utility's large industrial
and commercial customers and sell excess energy generation to other utilities.
Also, electricity sales for resale rates are being driven down by wholesale
transmission access and numerous potential new energy suppliers, including power
marketers and brokers. The Company is aggressively working to maintain and
expand its share of wholesale sales in the Southeastern power markets. Although
the Energy Act does not require transmission access to retail customers, retail
wheeling initiatives are rapidly evolving and becoming very prominent issues in
several states. New federal legislation is being discussed and legislation
allowing customer choice has been introduced in Georgia. In order to address
these initiatives, numerous questions must be resolved with the most complex
ones relating to transmission pricing and recovery of stranded investments. As
the initiatives become a reality, the structure of the utility industry could
radically change. Therefore, unless the Company remains a low-cost producer and
provides quality service, the Company's retail energy sales growth could be
limited, and this could significantly erode earnings. Conversely, being the
low-cost producer could provide significant opportunities to increase market
share and profitability.
The Company continues to compete with other electric suppliers within the
state. In Georgia, most new retail customers with at least 900 kilowatts of
connected load may choose their electricity supplier. In addition, the bulk
power market has become very competitive as utilities, IPPs and cogenerators
seek to supply future capacity needs. Competition can create new business
opportunities, but it increases risk and has the potential to adversely affect
earnings.
The Company is subject to the provisions of Financial Accounting Standards
Board (FASB) Statement No. 71, Accounting for the Effects of Certain Types of
Regulation. In the event that a portion of the Company's operations is no longer
subject to these provisions, the Company would be required to write off related
regulatory assets and liabilities, and determine if any other assets have been
impaired. See Note 1 to the financial statements under "Regulatory Assets and
Liabilities" for additional information.
The staff of the Securities and Exchange Commission has questioned certain
of the current accounting practices of the electric utility industry --
including the Company -- regarding the recognition, measurement, and
classification of decommissioning costs for nuclear generating facilities in the
financial statements. In response to these questions, the FASB has decided to
review the accounting for liabilities related to closure and removal of
long-lived assets, including nuclear decommissioning. If the FASB issues new
accounting rules, the estimated costs of closing and removing the Company's
nuclear and other facilities may be required to be recorded as liabilities in
the Balance Sheets. Also, the annual provisions for such costs could increase.
Because of the Company's current ability to recover closure and removal costs
through rates, these changes would not have a significant adverse effect on
results of operations. See Note 1 to the financial statements under
"Depreciation and Nuclear Decommissioning" for additional information.
New Accounting Standards
The FASB has issued Statement No. 121, Accounting for the Impairment of
Long-Lived Assets and Long-Lived Assets to Be Disposed Of. This statement
requires that long-lived assets be reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may not
be recoverable. This statement also imposes stricter criteria for regulatory
assets by requiring that such assets be probable of future recovery at each
balance sheet date. The Company adopted this standard January 1, 1996 with no
material effect on the financial statements. However, this conclusion may change
in the future as competitive factors influence wholesale and retail pricing in
this industry.
II-100
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Georgia Power Company 1995 Annual Report
FINANCIAL CONDITION
Overview
The principal changes in the Company's financial condition in 1995 were gross
utility plant additions of $480 million, which included the commercial operation
of four combustion turbine units (cumulatively, 320 megawatts of capacity) and
all three units of the Rocky Mountain pumped storage hydroelectric plant (the
Company's ownership interest is approximately 70 megawatts of capacity per
unit). In addition, the cost of capital was lowered through the refinancing or
retirement of $1.0 billion of long-term debt.
The funds needed for gross property additions are currently provided from
operations. The Statements of Cash Flows provide additional details.
Financing Activities
In 1995, the Company continued to lower its financing costs by refinancing
higher-cost issues. New issues during 1993 through 1995 totaled $2.7 billion and
retirement or repayment of securities totaled $3.4 billion. The retirements
included the redemption of $131 million, $133 million, and $253 million in 1995,
1994, and 1993, respectively, of first mortgage bonds with the proceeds from the
Plant Scherer Unit 4 sales. Composite financing rates for long-term debt and
preferred stock for the years 1993 through 1995, as of year-end, were as
follows:
1995 1994 1993
---------------------------------
Composite interest rate
on long-term debt 6.57% 7.14% 7.86%
Composite preferred
stock dividend rate 6.73 7.11 6.76
- - ----------------------------------------------------------------
The Company's current securities ratings are as follows:
Duff & Standard &
Phelps Moody's Poor's
------------------------------------
First Mortgage Bonds AA- A1 A+
Preferred Stock A a2 A
Unsecured Bonds A+ A2 A
Commercial Paper D1+ P1 A1
- - -----------------------------------------------------------------
Liquidity and Capital Requirements
Cash provided from operations increased by $281 million in 1995, primarily due
to increased revenues and a decrease in interest payments.
The Company estimates that construction expenditures for the years 1996
through 1998 will total $530 million, $537 million and $529 million,
respectively. Investments in transmission and distribution facilities,
enhancements to existing generating plants, and additions of a combustion
turbine generating plant and equipment to comply with the provisions of the
Clean Air Act are planned.
Cash requirements for sinking fund requirements, redemptions announced, and
maturities of long-term debt are expected to total $283 million during 1996
through 1998.
As a result of requirements by the Nuclear Regulatory Commission, the
Company has established external trust funds for the purpose of funding nuclear
decommissioning costs. For 1996 through 1998, the amount to be funded totals $24
million annually. For additional information concerning nuclear decommissioning
costs, see Note 1 to the financial statements under "Depreciation and Nuclear
Decommissioning."
As a result of the Energy Policy Act of 1992, the Company is required to pay
a special assessment over a 15-year period beginning in 1993 into a fund which
will be used by the U. S. Department of Energy for the decontamination and
decommissioning of its nuclear enrichment facilities. The Company estimates its
remaining liability to be approximately $31 million as of December 31, 1995. See
Note 1 to the financial statements under "Revenues and Fuel Costs" for
additional information.
Sources of Capital
The Company expects to meet future capital requirements primarily using funds
generated from operations and, if needed, by the issuance of new debt and equity
securities, term loans, and short-term borrowings. To meet short-term cash needs
and contingencies, the Company had approximately $975 million of unused credit
II-101
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Georgia Power Company 1995 Annual Report
arrangements with banks at the beginning of 1996. See Note 9 to the financial
statements under "Bank Credit Arrangements" for additional information.
The Company is required to meet certain coverage requirements specified in
its mortgage indenture and corporate charter to issue new first mortgage bonds
and preferred stock. The Company's ability to satisfy all coverage requirements
is such that it could issue new first mortgage bonds and preferred stock to
provide sufficient funds for all anticipated requirements.
Environmental Issues
In November 1990, the Clean Air Act was amended by Congress. Title IV of the
Clean Air Act -- the acid rain compliance provision of the law -- is having a
significant impact on the operating companies of The Southern Company, including
Georgia Power. Specific reductions in sulfur dioxide and nitrogen oxide
emissions from fossil-fired generating plants are required in two phases. Phase
I compliance began in 1995 and initially affected 28 generating units in the
Southern electric system. As a result of The Southern Company's compliance
strategy, an additional 22 generating units were brought into compliance with
Phase I requirements. Phase II compliance is required in 2000, and all
fossil-fired generating plants in the Southern electric system will be affected.
In 1995, the Environmental Protection Agency (EPA) began issuing annual
sulfur dioxide emission allowances through the newly established allowance
trading program. An emission allowance is the authority to emit one ton of
sulfur dioxide during a calendar year. The method for issuing allowances is
based on the fossil fuel consumed from 1985 through 1987 for each affected
generating unit. Emission allowances are transferable and can be bought, sold,
or banked and used in the future.
The sulfur dioxide emission allowance program is expected to minimize the
cost of compliance. The Southern Company's sulfur dioxide compliance strategy is
designed to use allowances as a compliance option.
The Southern Company achieved Phase I sulfur dioxide compliance at the
affected units by switching to low-sulfur coal, which has required some
equipment upgrades. This compliance strategy resulted in unused emission
allowances being banked for later use. Compliance with nitrogen oxide emission
limits was achieved by the installation of new control equipment at 22 of the
original 28 affected generating units. Construction expenditures for Georgia
Power's Phase I compliance totaled approximately $165 million through 1995.
For Phase II sulfur dioxide compliance, The Southern Company could use
emission allowances banked during Phase I, increase fuel switching, install flue
gas desulfurization equipment at selected plants, and/or purchase more
allowances depending on the price and availability of allowances. Also, in Phase
II, equipment to control nitrogen oxide emissions will be installed on
additional system fossil-fired plants as required to meet anticipated Phase II
limits. During the period 1996 to 2000, current compliance strategy could
require total estimated Georgia Power construction expenditures of approximately
$45 million. However, the full impact of Phase II compliance cannot now be
determined with certainty, pending the continuing development of a market for
emission allowances, the completion of EPA regulations, and the possibility of
new emission reduction technologies.
An increase of up to 1 percent in Georgia Power's annual revenue
requirements from customers could be necessary to fully recover the cost of
compliance for both Phase I and Phase II of Title IV of the Clean Air Act.
Compliance costs include construction expenditures, increased costs for
switching to low-sulfur coal, and costs related to emission allowances.
A significant portion of costs related to the acid rain provision of the
Clean Air Act is expected to be recovered through existing ratemaking
provisions. However, there can be no assurance that all Clean Air Act costs will
be recovered.
Metropolitan Atlanta is classified as a non-attainment area with regard to
the ozone ambient air quality standards. Title I of the Clean Air Act requires
the state of Georgia to conduct specific studies and establish new control rules
- - -- affecting sources of nitrogen oxides and volatile organic compounds -- to
achieve attainment by 1999. As the required first step, the state issued rules
for the application of reasonably available control technology to reduce
nitrogen oxide emissions by May 31, 1995. The results of these new rules require
II-102
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Georgia Power Company 1995 Annual Report
nitrogen oxide controls, above Title IV requirements, on some of the Company's
plants. The EPA along with 37 states is conducting studies to evaluate the
benefits of regional controls in meeting the ozone standards. Final attainment
rules, based on modeling studies, could require installation of additional
controls for nitrogen oxide emissions to meet the 1999 deadline or as part of
any regional controls if enacted. A decision on new requirements is expected in
1997. Compliance with any new rules could result in significant additional
costs. The actual impact of new rules will depend on the development and
implementation of such rules.
Title III of the Clean Air Act requires a multi-year EPA study of power
plant emissions of hazardous air pollutants. The EPA is scheduled to submit a
report to Congress on the results of this study during 1996. The report will
include a decision on whether additional regulatory control of these substances
is warranted. Compliance with any new control standards could result in
significant additional costs. The impact of new standards -- if any -- will
depend on the development and implementation of applicable regulations.
The EPA is evaluating the need to revise the ambient air quality standards
for particulate matter and ozone. The impact of any new standard will depend on
the level chosen for the standard and cannot be determined at this time.
In 1996, the EPA may issue revised rules on air quality control regulations
related to stack height requirements of the Clean Air Act. The full impact of
the final rules cannot be determined at this time, pending their development and
implementation.
In 1993, the EPA issued a ruling confirming the non-hazardous status of coal
ash. However, the EPA has until 1998 to classify co-managed utility wastes --
coal ash and other utility wastes -- as either non-hazardous or hazardous. If
the EPA classifies the co-managed wastes as hazardous, then substantial
additional costs for the management of such wastes may be required. The full
impact of any change in the regulatory status will depend on the subsequent
development of co-managed waste requirements.
The Company must comply with other environmental laws and regulations that
cover the handling and disposal of hazardous waste. Under these various laws and
regulations, the Company could incur costs to clean-up properties currently or
previously owned. The Company conducts studies to determine the extent of any
required clean-up costs and has recognized in the financial statements costs to
clean up known sites. These costs for the Company amounted to $8 million in 1995
and 1994, and $32 million in 1993. Additional sites may require environmental
remediation for which the Company may be liable for a portion of or all required
cleanup costs. See Note 3 to the financial statements under "Certain
Environmental Contingencies" for information regarding the Company's potentially
responsible party status at a site in Brunswick, Georgia and the status of sites
listed on the State of Georgia's hazardous site inventory.
Several major pieces of environmental legislation are being considered for
reauthorization or amendment by Congress. These include: the Clean Air Act; the
Clean Water Act; the Comprehensive Environmental Response, Compensation, and
Liability Act; the Resource Conservation and Recovery Act; the Toxic Substances
Control Act; and the Endangered Species Act. Changes to these laws could affect
many areas of the Company's operations. The full impact of these requirements
cannot be determined at this time, pending the development and implementation of
applicable regulations.
Compliance with possible additional legislation related to global climate
change, electromagnetic fields and other environmental and health concerns could
significantly affect the Company. The impact of new legislation -- if any --
will depend on the subsequent development and implementation of applicable
regulations. In addition, the potential exists for liability as the result of
lawsuits alleging damages caused by electromagnetic fields.
II-103
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF INCOME
For the Years Ended December 31, 1995, 1994, and 1993
Georgia Power Company 1995 Annual Report
==========================================================================================================================
1995 1994 1993
- - --------------------------------------------------------------------------------------------------------------------------
(in thousands)
<S> <C> <C> <C>
Operating Revenues:
Revenues $4,328,432 $4,101,504 $4,389,513
Revenues from affiliates 76,906 60,899 61,668
- - --------------------------------------------------------------------------------------------------------------------------
Total operating revenues 4,405,338 4,162,403 4,451,181
- - --------------------------------------------------------------------------------------------------------------------------
Operating Expenses:
Operation --
Fuel 900,973 870,653 951,507
Purchased power from non-affiliates 183,009 193,130 313,170
Purchased power from affiliates 131,740 158,063 194,024
Provision for separation benefits 10,607 82,238 -
Other 735,918 643,375 675,284
Maintenance 292,029 272,818 284,521
Depreciation and amortization 421,850 379,158 379,425
Amortization of deferred Plant Vogtle costs, net (Note 3) 124,454 74,888 36,284
Taxes other than income taxes 204,675 194,566 192,671
Federal and state income taxes 449,204 399,413 452,122
- - --------------------------------------------------------------------------------------------------------------------------
Total operating expenses 3,454,459 3,268,302 3,479,008
- - --------------------------------------------------------------------------------------------------------------------------
Operating Income 950,879 894,101 972,173
Other Income (Expense):
Allowance for equity funds used during construction 2,734 5,663 3,168
Equity in earnings of unconsolidated subsidiary (Note 4) 4,051 3,588 4,127
Interest income 5,524 3,254 3,806
Other, net (8,973) 10,626 11,902
Income taxes applicable to other income 3,022 7,975 37,661
- - --------------------------------------------------------------------------------------------------------------------------
Income Before Interest Charges 957,237 925,207 1,032,837
- - --------------------------------------------------------------------------------------------------------------------------
Interest Charges:
Interest on long-term debt 254,607 306,473 343,634
Allowance for debt funds used during construction (12,081) (11,571) (8,271)
Interest on interim obligations 21,463 17,529 15,530
Amortization of debt discount, premium, and expense, net 15,835 15,743 14,024
Other interest charges 20,399 23,483 47,393
- - --------------------------------------------------------------------------------------------------------------------------
Net interest charges 300,223 351,657 412,310
- - --------------------------------------------------------------------------------------------------------------------------
Net Income 657,014 573,550 620,527
Dividends on Preferred Stock 48,152 48,006 50,674
==========================================================================================================================
Net Income After Dividends on Preferred Stock $ 608,862 $ 525,544 $ 569,853
==========================================================================================================================
The accompanying notes are an integral part of these statements.
</TABLE>
II-104
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 1995, 1994, and 1993
Georgia Power Company 1995 Annual Report
===========================================================================================================================
1995 1994 1993
- - ---------------------------------------------------------------------------------------------------------------------------
(in thousands)
<S> <C> <C> <C>
Operating Activities:
Net income $ 657,014 $ 573,550 $ 620,527
Adjustments to reconcile net income to net
cash provided by operating activities --
Depreciation and amortization 527,310 484,032 475,152
Deferred income taxes and investment tax credits, net 37,150 33,567 150,735
Allowance for equity funds used during construction (2,734) (5,663) (3,168)
Amortization of deferred Plant Vogtle costs, net 124,454 74,888 36,284
Non-cash portion of separation benefits - 68,599 -
Gain on asset sales (23,588) (22,717) (35,514)
Other, net 23,722 (72,597) (10,713)
Changes in certain current assets and liabilities --
Receivables, net (59,370) 67,218 27,088
Inventories 30,761 (63,545) 82,433
Payables 45,882 5,409 17,364
Taxes accrued 11,373 (60,474) 15,377
Energy cost recovery, retail 42,576 55,505 (74,260)
Other 3,473 (706) (35,691)
- - ---------------------------------------------------------------------------------------------------------------------------
Net cash provided from operating activities 1,418,023 1,137,066 1,265,614
- - ---------------------------------------------------------------------------------------------------------------------------
Investing Activities:
Gross property additions (480,449) (638,426) (674,432)
Sales of property 131,099 132,644 261,687
Other (42,579) (41,273) (43,154)
- - ---------------------------------------------------------------------------------------------------------------------------
Net cash used for investing activities (391,929) (547,055) (455,899)
- - ---------------------------------------------------------------------------------------------------------------------------
Financing Activities:
Proceeds --
Preferred securities - 100,000 -
Preferred stock - - 175,000
First mortgage bonds 75,000 - 1,135,000
Pollution control bonds 504,700 527,210 145,425
Long-term notes - - 37,000
Retirements --
Preferred stock - - (245,005)
First mortgage bonds (505,789) (133,559) (1,337,822)
Pollution control bonds (504,810) (510,320) (145,465)
Other long-term debt (37,000) (10,187) (19,451)
Interim obligations, net (24,472) (57,425) (51,444)
Payment of preferred stock dividends (48,419) (47,147) (53,123)
Payment of common stock dividends (451,500) (429,300) (402,400)
Miscellaneous (17,413) (22,640) (63,648)
- - ---------------------------------------------------------------------------------------------------------------------------
Net cash used for financing activities (1,009,703) (583,368) (825,933)
- - ---------------------------------------------------------------------------------------------------------------------------
Net Change in Cash and Cash Equivalents 16,391 6,643 (16,218)
Cash and Cash Equivalents at Beginning of Year 12,539 5,896 22,114
- - ---------------------------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Year $ 28,930 $ 12,539 $ 5,896
===========================================================================================================================
Supplemental Cash Flow Information:
Cash paid during the year for --
Interest (net of amount capitalized) $ 298,482 $ 336,155 $ 420,107
Income taxes 404,129 386,653 275,867
- - ---------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these statements.
</TABLE>
II-105
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
At December 31, 1995 and 1994
Georgia Power Company 1995 Annual Report
=====================================================================================
ASSETS 1995 1994
- - -------------------------------------------------------------------------------------
(in thousands)
<S> <C> <C>
Utility Plant:
Plant in service $ 14,538,595 $14,054,917
Less accumulated provision for depreciation 4,417,120 4,054,986
- - -------------------------------------------------------------------------------------
10,121,475 9,999,931
Nuclear fuel, at amortized cost 124,849 136,425
Construction work in progress (Note 4) 236,715 541,889
- - -------------------------------------------------------------------------------------
Total 10,483,039 10,678,245
- - -------------------------------------------------------------------------------------
Other Property and Investments:
Southern Electric Generating Company, at equity (Note 4) 27,232 26,985
Nuclear decommissioning trusts, at market 92,273 54,297
Miscellaneous 120,383 89,542
- - -------------------------------------------------------------------------------------
Total 239,888 170,824
- - -------------------------------------------------------------------------------------
Current Assets:
Cash and cash equivalents 28,930 12,539
Receivables-
Customer accounts receivable 418,749 377,570
Other accounts receivable 102,953 104,989
Affiliated companies 15,482 14,443
Accumulated provision for uncollectible accounts (5,000) (4,500)
Fossil fuel stock, at average cost 145,151 169,252
Materials and supplies, at average cost 286,804 293,464
Prepayments 107,764 55,383
Vacation pay deferred 35,543 40,823
- - -------------------------------------------------------------------------------------
Total 1,136,376 1,063,963
- - -------------------------------------------------------------------------------------
Deferred Charges:
Deferred charges related to income taxes (Note 8) 871,783 919,750
Deferred Plant Vogtle costs (Note 3) 307,638 432,092
Premium on reacquired debt, being amortized 174,018 164,676
Debt expense, being amortized 27,227 26,223
Miscellaneous 230,306 256,885
- - -------------------------------------------------------------------------------------
Total 1,610,972 1,799,626
- - -------------------------------------------------------------------------------------
Total Assets $13,470,275 $13,712,658
=====================================================================================
The accompanying notes are an integral part of these statements.
</TABLE>
II-106
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
At December 31, 1995 and 1994
Georgia Power Company 1995 Annual Report
=================================================================================================
CAPITALIZATION AND LIABILITIES 1995 1994
- - -------------------------------------------------------------------------------------------------
(in thousands)
<S> <C> <C>
Capitalization (See accompanying statements):
Common stock equity $ 4,299,012 $4,141,554
Preferred stock 692,787 692,787
Subsidiary obligated mandatorily redeemable preferred securities 100,000 100,000
Long-term debt 3,315,460 3,757,823
- - -------------------------------------------------------------------------------------------------
Total 8,407,259 8,692,164
- - -------------------------------------------------------------------------------------------------
Current Liabilities:
Long-term debt due within one year (Note 9) 150,446 167,420
Notes payable to banks (Note 9) 178,000 202,200
Commercial paper (Note 9) 222,330 222,602
Accounts payable-
Affiliated companies 72,878 41,760
Other 316,278 313,307
Customer deposits 53,145 47,017
Taxes accrued-
Federal and state income 7,759 2,856
Other 96,633 90,163
Interest accrued 96,162 110,256
Vacation pay accrued 34,233 39,720
Miscellaneous 137,184 70,006
- - -------------------------------------------------------------------------------------------------
Total 1,365,048 1,307,307
- - -------------------------------------------------------------------------------------------------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes (Note 8) 2,510,458 2,477,661
Accumulated deferred investment tax credits 432,184 453,121
Deferred credits related to income taxes (Note 8) 410,016 433,334
Disallowed Plant Vogtle capacity buyback costs (Note 4) 58,514 60,490
Miscellaneous 286,796 288,581
- - -------------------------------------------------------------------------------------------------
Total 3,697,968 3,713,187
- - -------------------------------------------------------------------------------------------------
Commitments and Contingent Matters (Notes 1, 2, 3, 4, 5, 6, and 7)
Total Capitalization and Liabilities $13,470,275 $13,712,658
==================================================================================================
The accompanying notes are an integral part of these statements.
</TABLE>
II-107
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CAPITALIZATION
At December 31, 1995 and 1994
Georgia Power Company 1995 Annual Report
- - ----------------------------------------------------------------------------------------------------------------------------------
1995 1994 1995 1994
- - ----------------------------------------------------------------------------------------------------------------------------------
(in thousands) (percent of total)
<S> <C> <C>
Common Stock Equity:
Common stock, without par value --
Authorized -- 15,000,000 shares
Outstanding -- 7,761,500 shares $ 344,250 $ 344,250
Paid-in capital 2,384,444 2,384,348
Premium on preferred stock 413 413
Retained earnings (Note 9) 1,569,905 1,412,543
- - ----------------------------------------------------------------------------------------------------------------------------------
Total common stock equity 4,299,012 4,141,554 51.1% 47.6%
- - ----------------------------------------------------------------------------------------------------------------------------------
Cumulative Preferred Stock, without par value:
Authorized -- 55,000,000 shares
Outstanding -- 21,027,864 shares
$100 stated value --
4.60% to 6.60% 117,787 117,787
7.72% to 7.80% 105,000 105,000
$25 stated value --
$1.90 to $2.125 295,000 295,000
Adjustable rate -- at January 1, 1996:
4.85% 100,000 100,000
5.27% 75,000 75,000
- - ----------------------------------------------------------------------------------------------------------------------------------
Total (annual dividend requirement -- $46,608,000) 692,787 692,787 8.2 8.0
- - ----------------------------------------------------------------------------------------------------------------------------------
Subsidiary Obligated Mandatorily
Redeemable Preferred Securities (Note 9):
$25 stated value -- 9% 100,000 100,000
- - ----------------------------------------------------------------------------------------------------------------------------------
Total (annual distribution requirement -- $9,000,000) 100,000 100,000 1.2 1.2
- - ----------------------------------------------------------------------------------------------------------------------------------
Long-Term Debt:
First mortgage bonds --
Maturity Interest Rates
September 1, 1995 5 1/8% - 130,000
March 1, 1996 4 3/4% 150,000 150,000
April 1, 1998 5 1/2% 100,000 100,000
September 1, 1999 6 1/8% 195,000 195,000
2000 through 2003 6% to 7% 625,000 625,000
2008 6 7/8% 50,000 50,000
2019 9.23% - 36,157
2022 through 2025 7.55% to 8 3/4% 595,368 660,000
2032 variable rates - 200,000
- - ----------------------------------------------------------------------------------------------------------------------------------
Total first mortgage bonds 1,715,368 2,146,157
Pollution control obligations (Note 9) 1,678,030 1,678,140
Other long-term debt (Note 9) 87,400 124,686
Unamortized debt premium (discount), net (14,892) (23,740)
- - ----------------------------------------------------------------------------------------------------------------------------------
Total long-term debt (annual interest
requirement -- $228,539,000) 3,465,906 3,925,243
Less amount due within one year (Note 9) 150,446 167,420
- - ----------------------------------------------------------------------------------------------------------------------------------
Long-term debt excluding amount due within one year 3,315,460 3,757,823 39.5 43.2
- - ----------------------------------------------------------------------------------------------------------------------------------
Total Capitalization $ 8,407,259 $ 8,692,164 100.0% 100.0%
==================================================================================================================================
The accompanying notes are an integral part of these statements.
</TABLE>
II-108
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF RETAINED EARNINGS
For the Years Ended December 31, 1995, 1994, and 1993
Georgia Power Company 1995 Annual Report
- - ----------------------------------------------------------------------------------------------------------------------------------
1995 1994 1993
- - ----------------------------------------------------------------------------------------------------------------------------------
(in thousands)
<S> <C> <C> <C>
Balance at Beginning of Period $ 1,412,543 $ 1,316,447 $ 1,159,380
Net income after dividends on preferred stock 608,862 525,544 569,853
Cash dividends on common stock (451,500) (429,300) (402,400)
Preferred stock transactions, net - (148) (10,386)
==================================================================================================================================
Balance at End of Period (Note 9) $ 1,569,905 $ 1,412,543 $ 1,316,447
==================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
STATEMENTS OF PAID-IN CAPITAL
For the Years Ended December 31, 1995, 1994, and 1993
Georgia Power Company 1995 Annual Report
- - ----------------------------------------------------------------------------------------------------------------------------------
1995 1994 1993
- - ----------------------------------------------------------------------------------------------------------------------------------
(in thousands)
<S> <C> <C> <C>
Balance at Beginning of Period $ 2,384,348 $ 2,384,348 $ 2,384,140
Contributions to capital by parent company 96 - 208
==================================================================================================================================
Balance at End of Period $ 2,384,444 $ 2,384,348 $ 2,384,348
==================================================================================================================================
The accompanying notes are an integral part of these statements.
</TABLE>
II-109
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Georgia Power Company 1995 Annual Report
1. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
General
The Company is a wholly owned subsidiary of The Southern Company, which is the
parent company of five operating companies, Southern Company Services (SCS), a
system service company, Southern Communications Services (Southern
Communications), Southern Electric International (Southern Electric), Southern
Nuclear Operating Company (Southern Nuclear), The Southern Development and
Investment Group (Southern Development), and other direct and indirect
subsidiaries. The operating companies (Alabama Power Company, Georgia Power
Company, Gulf Power Company, Mississippi Power Company, and Savannah Electric
and Power Company) provide electric service in four Southeastern states.
Contracts among the companies -- dealing with jointly owned generating
facilities, interconnecting transmission lines, and the exchange of electric
power -- are regulated by the Federal Energy Regulatory Commission (FERC) or the
Securities and Exchange Commission (SEC). SCS provides, at cost, specialized
services to The Southern Company and subsidiary companies. Southern
Communications provides digital wireless communications services to the
operating companies and also markets these services to the public within the
Southeast. Southern Electric designs, builds, owns, and operates power
production and delivery facilities and provides a broad range of technical
services to industrial companies and utilities in the United States and a number
of international markets. Southern Nuclear provides services to The Southern
Company's nuclear power plants. Southern Development develops new business
opportunities related to energy products and services.
The Southern Company is registered as a holding company under the Public
Utility Holding Company Act of 1935 (PUHCA). Both The Southern Company and its
subsidiaries are subject to the regulatory provisions of this act. The Company
is also subject to regulation by the FERC and the Georgia Public Service
Commission (GPSC). The Company follows generally accepted accounting principles
(GAAP) and complies with the accounting policies and practices prescribed by the
respective regulatory commissions. The preparation of financial statements in
conformity with GAAP requires the use of estimates, and the actual results may
differ from these estimates.
Certain prior years' data presented in the financial statements have been
reclassified to conform with current year presentation.
Regulatory Assets and Liabilities
The Company is subject to the provisions of Financial Accounting Standards Board
(FASB) Statement No. 71, Accounting for the Effects of Certain Types of
Regulation. Regulatory assets represent probable future revenues to the Company
associated with certain costs that are expected to be recovered from customers
through the ratemaking process. Regulatory liabilities represent probable future
reductions in revenues associated with amounts that are to be credited to
customers through the ratemaking process. Regulatory assets and (liabilities)
reflected in the Company's Balance Sheets at December 31 relate to the
following:
1995 1994
--------------------
(in millions)
Deferred income taxes $ 872 $ 920
Deferred income tax credits (410) (433)
Deferred Plant Vogtle costs 308 432
Premium on reacquired debt 174 165
Demand-side program costs 79 97
Corporate building lease 49 48
Postretirement benefits 53 41
Vacation pay 36 41
Inventory conversions (31) (39)
Department of Energy assessments 33 36
Other, net 36 52
==============================================================
Total $1,199 $1,360
==============================================================
In the event that a portion of the Company's operations is no longer subject
to the provisions of Statement No. 71, the Company would be required to write
off related regulatory assets and liabilities. In addition, the Company would be
required to determine any impairment to other assets, including plant, and write
down the assets, if impaired, to their fair value.
II-110
<PAGE>
NOTES (continued)
Georgia Power Company 1995 Annual Report
Revenues and Fuel Costs
The Company accrues revenues for service rendered but unbilled at the end of
each fiscal period. Fuel costs are expensed as the fuel is used. The Company's
electric rates include provisions to adjust billings for fluctuations in fuel
and the energy component of purchased power costs. Revenues are adjusted for
differences between recoverable fuel costs and amounts actually recovered in
current rates.
The Company has a diversified base of customers. No single customer or
industry comprises 10 percent or more of revenues. In 1995, uncollectible
accounts continued to average less than 1 percent of revenues.
Fuel expense includes the amortization of the cost of nuclear fuel and a
charge, based on nuclear generation, for the permanent disposal of spent nuclear
fuel. Total charges for nuclear fuel included in fuel expense amounted to $86
million in 1995, $87 million in 1994, and $75 million in 1993. The Company has a
contract with the U.S. Department of Energy (DOE) that provides for the
permanent disposal of spent nuclear fuel, which was scheduled to begin in 1998.
However, the actual year this service will begin is uncertain. Sufficient
storage capacity currently is available to permit operation into 2003 at Plant
Hatch and into 2009 at Plant Vogtle.
Also, the Energy Policy Act of 1992 required the establishment in 1993 of a
Uranium Enrichment Decontamination and Decommissioning Fund, which is to be
funded in part by a special assessment on utilities with nuclear plants. This
fund will be used by the DOE for the decontamination and decommissioning of its
nuclear fuel enrichment facilities. The assessment will be paid over a 15-year
period, which began in 1993. The law provides that utilities will recover these
payments in the same manner as any other fuel expense. The Company -- based on
its ownership interests -- estimates its remaining liability under this law at
December 31, 1995, to be approximately $31 million. This obligation is recorded
in the accompanying Balance Sheets.
Depreciation and Nuclear Decommissioning
Depreciation of the original cost of depreciable utility plant in service is
provided primarily by using composite straight-line rates, which approximated
3.2 percent in 1995 and 3.1 percent in 1994 and 1993. See Note 3 under "Retail
Rate Plan" for additional information. When property subject to depreciation is
retired or otherwise disposed of in the normal course of business, its cost --
together with the cost of removal, less salvage -- is charged to the accumulated
provision for depreciation. Minor items of property included in the original
cost of the plant are retired when the related property unit is retired.
Depreciation expense includes an amount for the expected costs of
decommissioning nuclear facilities and removal of other facilities.
In 1988, the Nuclear Regulatory Commission (NRC) adopted regulations
requiring all licensees operating commercial nuclear power reactors to establish
a plan for providing, with reasonable assurance, funds for decommissioning. The
Company has established external trust funds to comply with the NRC's
regulations. Amounts previously recorded in internal reserves are being
transferred into the external trust funds over a set period of time as approved
by the GPSC. Earnings on the trust funds are considered in determining
decommissioning expense. The NRC's minimum external funding requirements are
based on a generic estimate of the cost to decommission the radioactive portions
of a nuclear unit based on the size and type of reactor. The Company has filed
plans with the NRC to ensure that -- over time -- the deposits and earnings of
the external trust funds will provide the minimum funding amounts prescribed by
the NRC.
The site study cost is the estimate to decommission the facility as of the
site study year, and ultimate cost is the estimate to decommission the facility
as of the retirement
II-111
<PAGE>
NOTES (continued)
Georgia Power Company 1995 Annual Report
date. The estimated costs of decommissioning -- both site study costs and
ultimate costs at December 31, 1995 -- based on the Company's ownership
interests -- were as follows:
Plant Plant
Hatch Vogtle
--------------------
Site study basis (year) 1994 1994
Decommissioning periods:
Beginning year 2014 2027
Completion year 2027 2038
- - ------------------------------------------------------------
(in millions)
Site study costs:
Radiated structures $294 $233
Non-radiated structures 41 52
============================================================
Total $335 $285
============================================================
(in millions)
Ultimate costs:
Radiated structures $781 $1,018
Non-radiated structures 111 230
- - ------------------------------------------------------------
Total $892 $1,248
============================================================
(in millions)
Amount expensed in 1995 $11 $ 9
Accumulated provisions:
Balance in external trust funds $56 $36
Balance in internal reserves 30 13
============================================================
Total $86 $49
============================================================
Significant assumptions:
Inflation rate 4.4% 4.4%
Trust earnings rate 6.0 6.0
- - ------------------------------------------------------------
Annual provisions for nuclear decommissioning are based on an annuity --
sinking fund -- method as approved by the GPSC. The decommissioning costs
included in cost of service are based on the higher of the costs to decommission
the radioactive portions of the plants based on 1994 site studies or the NRC
minimum funding requirements. The Company expects the GPSC to periodically
review and adjust, if necessary, the amounts collected in rates for the
anticipated cost of decommissioning.
The decommissioning cost estimates are based on prompt dismantlement and
removal of the plant from service. The actual decommissioning costs may vary
from the above estimates because of: changes in the assumed date of
decommissioning; changes in NRC requirements; changes in the assumptions used in
making estimates; changes in regulatory requirements; changes in technology; and
changes in costs of labor, materials, and equipment.
Income Taxes
The Company uses the liability method of accounting for deferred income taxes
and provides deferred income taxes for all significant income tax temporary
differences. Investment tax credits utilized are deferred and amortized to
income over the average lives of the related property.
Plant Vogtle Phase-In Plans
In 1987 and 1989, the GPSC ordered that the allowed costs of Plant Vogtle, a
two-unit nuclear facility of which Georgia Power owns 45.7 percent, be phased
into rates under plans that meet the requirements of FASB Statement No. 92,
Accounting for Phase-In Plans. In 1991, the GPSC modified the phase-in plans. In
addition, the Company deferred certain Plant Vogtle operating expenses and
financing costs under accounting orders issued by the GPSC. See Note 3 for
further information.
Allowance for Funds Used During Construction (AFUDC)
AFUDC represents the estimated debt and equity costs of capital funds that are
necessary to finance the construction of new facilities. While cash is not
realized currently from such allowance, it increases the revenue requirement
over the service life of the plant through a higher rate base and higher
depreciation expense. For the years 1995, 1994 and 1993, the average AFUDC rates
were 6.53 percent, 6.18 percent and 4.96 percent, respectively. The increase in
1994 is primarily the result of the higher short-term borrowing rates. AFUDC,
net of taxes, as a percentage of net income after dividends on preferred stock,
was less than 2.5 percent for 1995, 1994, and 1993.
II-112
<PAGE>
NOTES (continued)
Georgia Power Company 1995 Annual Report
Utility Plant
Utility plant is stated at original cost with the exception of Plant Vogtle,
which is stated at cost less regulatory disallowances. Original cost includes:
materials; labor; appropriate administrative and general costs; payroll-related
costs such as taxes, pensions, and other benefits; and the cost of funds used
during construction. The cost of maintenance, repairs, and replacement of minor
items of property is charged to maintenance expense. The cost of replacements of
property (exclusive of minor items of property) is charged to utility plant.
Cash and Cash Equivalents
For purposes of the Statements of Cash Flows, temporary cash investments are
considered cash equivalents. Temporary cash investments are securities with
original maturities of 90 days or less.
Financial Instruments
In accordance with FASB Statement No. 107, Disclosure About Fair Value of
Financial Instruments, the Company's financial instruments for which the
carrying amounts did not approximate fair value at December 31 are as follows:
Carrying Fair
Amount Value
--------------------------
Long-term debt: (in millions)
At December 31, 1995 $3,378 $3,487
At December 31, 1994 3,838 3,697
Preferred Securities:
At December 31, 1995 100 114
- - ---------------------------------------------------------------
The fair values for securities were based on either closing market prices or
closing prices of comparable instruments.
Materials and Supplies
Generally, materials and supplies include the cost of transmission, distribution
and generating plant materials. Materials are charged to inventory when
purchased and then expensed or capitalized to plant, as appropriate, when
installed.
2. RETIREMENT BENEFITS
Pension Plan
The Company has a defined benefit, trusteed,
non-contributory pension plan covering substantially all regular employees.
Benefits are based on one of the following formulas: years of service and final
average pay or years of service and a flat dollar benefit. The Company uses the
"entry age normal method with a frozen initial liability" actuarial method for
funding purposes, subject to limitations under federal income tax regulations.
Amounts funded to the pension trusts are primarily invested in equity and
fixed-income securities. FASB Statement No. 87, Employers' Accounting for
Pensions, requires use of the "projected unit credit" actuarial method for
financial reporting purposes.
Postretirement Benefits
The Company also provides certain medical care and life insurance benefits for
retired employees. Substantially all employees may become eligible for these
benefits when they retire. Qualified trusts are funded to the extent deductible
under federal income tax regulations and to the extent required by the GPSC and
the FERC. During 1995 and 1994, the Company funded $21 million and $22 million,
respectively, to the qualified trusts. Amounts funded are primarily invested in
debt and equity securities.
FASB Statement No. 106, Employers' Accounting for Postretirement Benefits
Other Than Pensions, requires that medical care and life insurance benefits for
retired employees be accounted for on an accrual basis using a specified
actuarial method, "benefit/years-of-service." In October 1993, the GPSC ordered
the Company to phase in the adoption of Statement No. 106 to cost of service
over a five-year period, whereby one-fifth of the additional cost was expensed
in 1993, and the remaining additional costs were deferred. An additional
one-fifth of the costs will be expensed each succeeding year until the costs are
fully reflected in cost of service in 1997. The cost deferred during the
five-year period will be amortized to expense over a 15-year period beginning in
1998. As a result of the regulatory treatment allowed by the GPSC, the adoption
of Statement No. 106 did not have a material impact on net income.
II-113
<PAGE>
NOTES (continued)
Georgia Power Company 1995 Annual Report
Funded Status and Cost of Benefits
The following tables show actuarial results and assumptions for pension and
postretirement benefits as computed under the requirements of FASB Statement
Nos. 87 and 106, respectively. The funded status of the plans at December 31 was
as follows:
Pension
---------------------
1995 1994
---------------------
Actuarial present value of (in millions)
benefit obligations:
Vested benefits $ 830 $ 689
Non-vested benefits 43 32
- - ---------------------------------------------------------------
Accumulated benefit obligation 873 721
Additional amounts related
to projected salary increases 290 294
- - ---------------------------------------------------------------
Projected benefit obligation 1,163 1,015
Less:
Fair value of plan assets 1,688 1,419
Unrecognized net gain (465) (371)
Unrecognized prior service cost 26 28
Unrecognized transition asset (52) (58)
===============================================================
Prepaid asset recognized in
the Balance Sheets $ 34 $ 3
===============================================================
Postretirement
Benefits
---------------------
1995 1994
---------------------
(in millions)
Actuarial present value of benefit obligation:
Retirees and dependents $214 $203
Employees eligible to retire 16 7
Other employees 188 229
- - ---------------------------------------------------------------
Accumulated benefit obligation 418 439
Less:
Fair value of plan assets 81 52
Unrecognized net loss (gain) 44 (1)
Unrecognized transition
obligation 186 301
===============================================================
Accrued liability recognized in the
Balance Sheets $107 $ 87
===============================================================
In 1995, the Company announced a cost sharing program for postretirement
benefits. The program establishes limits on amounts the Company will pay to
provide future postretirement benefits. This change reduced the 1995 accumulated
postretirement benefit obligation by approximately $97 million.
The weighted average rates used in actuarial calculations were:
1995 1994 1993
-------------------------------
Discount 7.3% 8.0% 7.5%
Annual salary increase 4.8 5.5 5.0
Long-term return on
plan assets 8.5 8.5 8.5
- - ---------------------------------------------------------------
An additional assumption used in measuring the accumulated postretirement
medical benefit obligation was a weighted average medical care cost trend rate
of 9.8 percent for 1995, decreasing gradually to 5.3 percent through the year
2005 and remaining at that level thereafter. An annual increase in the assumed
medical care cost trend rate of 1 percent would increase the accumulated benefit
obligation as of December 31, 1995, by $39 million and the aggregate of the
service and interest cost components of the net postretirement cost by $8
million.
The components of the plans' net costs are shown below:
Pension
-----------------------------
1995 1994 1993
-----------------------------
(in millions)
Benefits earned during the year $ 33 $ 34 $ 33
Interest cost on projected
benefit obligation 78 71 69
Actual (return) loss on plan assets (317) 35 (194)
Net amortization and deferral 185 (160) 84
================================================================
Net pension cost $ (21) $ (20) $ (8)
================================================================
Net pension costs were negative in 1995, 1994 and 1993. Of net pension
amounts recorded, $15 million in 1995 and 1994, and $6 million in 1993 were
recorded as a
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Georgia Power Company 1995 Annual Report
reduction to operating expense, and the remainder was recorded as a reduction
to construction and other accounts.
Postretirement Benefits
--------------------------
1995 1994 1993
--------------------------
(in millions)
Benefits earned during the year $13 $15 $14
Interest cost on accumulated
benefit obligation 34 33 29
Amortization of transition
obligation 16 15 15
Actual (return) loss on plan
assets (8) 1 (4)
Net amortization and deferral 4 (3) 2
==================================================================
Net postretirement cost $59 $61 $56
==================================================================
Of the above net postretirement benefit costs recorded, $33 million in 1995,
$28 million in 1994, and $21 million in 1993 were charged to operating expenses.
In addition, $11 million in 1995, $18 million in 1994, and $21 million in 1993
were deferred, and the remainder was charged to construction and other accounts.
Work Force Reduction Programs
The Company has incurred additional costs for work force reduction programs. The
costs related to these programs were $11 million and $82 million for the years
1995 and 1994, respectively. Additionally, in 1994, the Company recognized $8
million for its share of costs associated with SCS's work force reduction
program.
3. REGULATORY AND LITIGATION MATTERS
Retail Rate Plan
On February 16, 1996, the GPSC approved a rate plan recommended by the
Commission staff which concludes the GPSC's review of the Company's earnings
initiated in early 1995 and addresses the Company's proposed alternative retail
rate plan. Under the three-year plan effective January 1, 1996, the Company's
earnings will be evaluated against a retail return on common equity range of 10
percent to 12.5 percent. Earnings in excess of 12.5 percent will be used to
accelerate the amortization of regulatory assets or depreciation of electric
plant. At its option, the Company may also recognize accelerated amortization or
depreciation of assets within the allowed return on common equity range. The
Company is required to absorb cost increases of approximately $29 million
annually during the plan's three-year operation, including $14 million annually
of accelerated depreciation of electric plant. During the plan's operation, the
Company will not file for a general base rate increase unless its projected
retail return on common equity falls below 10 percent. Under the approved plan,
on July 1, 1998 the Company will make a general rate case filing in response to
which the GPSC would be expected either to continue the rate plan or adopt a
different one.
Rocky Mountain Plant Status
In its 1985 financing order, the GPSC concluded that completion of the Rocky
Mountain pumped storage hydroelectric plant in 1991, as then planned, was not
economically justifiable and reasonable and withheld authorization for the
Company to spend funds from approved securities issuances on that plant. In
1988, the Company and OPC entered into a joint ownership agreement for OPC to
assume responsibility for the construction and operation of the plant, as
discussed in Note 6. However, full recovery of the Company's costs depends on
the GPSC's treatment of the plant's costs and disposition of the plant's
capacity output. In the event the GPSC does not allow full recovery of the
plant's costs, then the portion not allowed may have to be written off. AFUDC
accrued on the Rocky Mountain plant was not credited to income or included in
the plant's cost since December 1985. In 1995, the plant went into commercial
operation. At December 31, 1995, the Company's net investment in the plant was
approximately $190 million, and the Company's ownership was 25.4 percent.
The final outcome of this matter cannot now be determined. Accordingly, no
provision for any write-down of the investment in the plant has been made.
Demand-Side Conservation Programs
In October 1993, a Superior Court of Fulton County, Georgia, judge ruled that
rate riders previously approved by the GPSC for recovery of the Company's costs
incurred in connection with demand-side conservation programs were unlawful. The
judge held that the GPSC lacked statutory authority to approve such rate riders
except through general rate case proceedings and that those procedures had not
been followed. The Company suspended collection of the demand-side conservation
II-115
<PAGE>
NOTES (continued)
Georgia Power Company 1995 Annual Report
costs and appealed the court's decision to the Georgia Court of Appeals. In
December 1993, the GPSC approved the Company's request for an accounting order
allowing the Company to defer all current unrecovered and future costs related
to these programs until the Superior Court's decision is reversed or until the
next general rate case proceedings.
After the Georgia Court of Appeals upheld the legality of the rate riders,
the Company resumed collection under the rate riders in December 1994. In August
1995, the GPSC ordered the Company to discontinue its current demand-side
conservation programs by the end of 1995. The rate riders will remain in effect
until costs deferred are collected.
Under the Retail Rate Plan approved February 16, 1996, the Company will
recognize approximately $29 million of deferred program costs over a three-year
period which will not be recovered through the riders.
FERC Review of Equity Returns
In May 1991, the FERC ordered that hearings be conducted concerning the
reasonableness of the Southern electric system's wholesale rate schedules and
contracts that have a return on common equity of 13.75 percent or greater. The
contracts that could be affected by the hearings include substantially all of
the transmission, unit power, long-term power, and other similar contracts. Any
change in the rate of return on common equity that could potentially require
refunds as a result of this proceeding would be substantially for the period
beginning in July 1991 and ending in October 1992.
In August 1992, a FERC administrative law judge issued an opinion that
changes in rate schedules and contracts were not necessary and that the FERC
staff failed to show how any changes were in the public interest. The FERC staff
has filed exceptions to the administrative law judge's opinion, and the matter
remains pending before the FERC.
In August 1994, the FERC instituted another proceeding based on
substantially the same issues as in the 1991 proceeding. The second period under
review for possible refunds began in October 1994 and ended in December 1995. In
November 1995, a FERC administrative law judge issued an opinion that the FERC
staff failed to meet its burden of proof, and therefore no change in the equity
return was necessary. The FERC staff has filed exceptions to the administrative
law judge's opinion, and the matter remains pending before the FERC.
If the rates of return on common equity recommended by the FERC staff were
applied to all the schedules and contracts involved in both proceedings and
refunds were ordered, the amount of refunds could range up to approximately $49
million at December 31, 1995. However, management believes that rates are not
excessive, and that refunds are not justified.
Certain Environmental Contingencies
In January 1995, the Company and four other unrelated entities were notified by
the EPA that they have been designated as potentially responsible parties under
the Comprehensive Environmental Response, Compensation and Liability Act with
respect to a site in Brunswick, Georgia. As of December 31, 1995, the Company
has recognized $3.5 million in expenses associated with this site. While the
Company believes that the total amount of costs required for the clean up of
this site may be substantial, it is unable at this time to estimate either such
total or the portion for which the Company may ultimately be responsible.
The final outcome of this matter cannot now be determined. However, based on
the nature and extent of the Company's activities relating to the site,
management believes that the Company's portion of these costs should not be
material.
In compliance with the Georgia Hazardous Site Response Act of 1993, the State
of Georgia was required to compile an inventory of all known or suspected sites
where hazardous wastes, constituents or substances have been disposed of or
released in quantities deemed reportable by the State. In developing this list,
the State identified several hundred properties throughout the State, including
24 sites which may require environmental remediation by the Company. The
majority of these 24 sites are electrical power substations and power generation
facilities. The Company has recognized $10 million in expenses through December
31, 1995 for the anticipated clean-up cost for 18 sites that the Company plans
II-116
<PAGE>
NOTES (continued)
Georgia Power Company 1995 Annual Report
to remediate. The Company will conduct studies at each of the remaining sites to
determine the extent of remediation and associated clean-up costs, if any, that
may be required. The Company has recognized $2.4 million in expenses for the
anticipated cost of completing such studies. Any cost of remediating the
remaining sites cannot presently be determined until such studies are completed
for each site and the State of Georgia determines whether remediation is
required. If all listed sites were required to be remediated, the Company could
incur expenses of up to approximately $15 million in additional clean-up costs
and construction expenditures of up to approximately $100 million to develop new
waste management facilities or install additional pollution control devices.
Wholesale Litigation
In July 1994, Oglethorpe Power Corporation (OPC) and the Municipal Electric
Authority of Georgia (MEAG) filed a joint complaint with the FERC seeking to
recover from the Company an aggregate of approximately $16.5 million in alleged
partial requirements rates overcharges, plus approximately $6.3 million in
interest. OPC and MEAG claimed that the Company improperly reflected in such
rates costs associated with capacity that had previously been sold to Gulf
States pursuant to a unit power sales contract or, alternatively, that they
should be allocated a portion of the proceeds received by the Company as a
result of a settlement with Gulf States of litigation arising out of such
contract. The Company's response sought dismissal of the complaint by the FERC.
Dismissal was ordered in November 1994. OPC and MEAG filed a request for
rehearing in December 1994, and the FERC denied such request in July 1995. In
September 1995, OPC appealed the FERC's decision on this issue to the Court of
Appeals for the District of Columbia Circuit.
In August 1994, OPC and MEAG also filed a complaint in the Superior Court of
Fulton County, Georgia, urging substantially the same claims and asking the
court to hear the matter in the event the FERC declines jurisdiction. Such court
proceeding was subsequently stayed pending resolution of the FERC filing.
Plant Vogtle Phase-In Plans
Pursuant to orders from the GPSC, the Company recorded a deferred return under
phase-in plans for Plant Vogtle Units 1 and 2 until October 1991 when the
allowed investment was fully reflected in rates. In addition, the GPSC issued
two separate accounting orders that required the Company to defer substantially
all operating and financing costs related to both units until rate orders
addressed these costs. These GPSC orders provide for the recovery of deferred
costs within 10 years. The GPSC modified the phase-in plans in 1991 to
accelerate the recognition of costs previously deferred under the Plant Vogtle
Unit 2 phase-in plan and to levelize the remaining Plant Vogtle declining
capacity buyback expenses.
Under these orders, the Company has deferred and amortized these costs (as
recovered through rates) as follows:
1995 1994 1993
-----------------------------
(in millions)
Deferred costs at beginning
of year $432 $507 $383
- - ----------------------------------------------------------------
Deferred capacity buyback
expenses - 10 38
Amortization of previously
deferred costs (124) (85) (74)
- - ----------------------------------------------------------------
Net amortization (124) (75) (36)
- - ----------------------------------------------------------------
Effect of adoption of FASB
Statement No. 109 - - 160
================================================================
Deferred costs at end of year $308 $432 $507
================================================================
Nuclear Performance Standards
In October 1989, the GPSC adopted a nuclear performance standard for the
Company's nuclear generating units under which the performance of plants Hatch
and Vogtle will be evaluated every three years. The performance standard is
based on each unit's capacity factor as compared to the average of all U.S.
nuclear units operating at a capacity factor of 50 percent or higher during the
three-year period of evaluation. Depending on the performance of the units, the
Company could receive a monetary reward or penalty under the performance
standards criteria. The first evaluation was conducted in 1993 for performance
during the 1990-92 period. During this three-year period, the Company's units
performed at an average capacity factor of 81 percent compared to an industry
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<PAGE>
NOTES (continued)
Georgia Power Company 1995 Annual Report
average of approximately 73 percent. Based on these results, the GPSC approved a
performance reward of approximately $8.5 million for the Company. This reward is
being collected through the retail fuel cost recovery provision and recognized
in income over a 36-month period beginning November 1993. At December 31, 1995,
the remaining amount to be collected was $2.4 million.
4. COMMITMENTS
Construction Program
While the Company has no new baseload generating plants under construction, the
construction of one jointly owned combustion turbine peaking unit is planned to
be completed in 1996. In addition, significant construction of transmission and
distribution facilities, and projects to upgrade and extend the useful life of
generating plants will continue. The Company currently estimates property
additions to be approximately $530 million in 1996, $537 million in 1997, and
$529 million in 1998. These estimated additions include AFUDC of $12 million in
1996, $14 million in 1997, and $15 million in 1998. The estimates for property
additions for the three-year period include $67 million committed to meeting the
requirements of the Clean Air Act.
The construction program is subject to periodic review and revision, and
actual construction costs may vary from estimates because of numerous factors,
including, but not limited to, changes in business conditions, load growth
estimates, environmental regulations, and regulatory requirements.
Fuel Commitments
To supply a portion of the fuel requirements of its generating plants, the
Company has entered into various long-term commitments for the procurement of
fossil and nuclear fuel. In most cases, these contracts contain provisions for
price escalations, minimum purchase levels and other financial commitments.
Total estimated long-term fossil and nuclear fuel commitments at December 31,
1995 were as follows:
Minimum
Year Obligations
----------------------
(in millions)
1996 $ 831
1997 678
1998 534
1999 321
2000 231
2001 through 2010 1,624
===============================================================
Total minimum obligations $4,219
===============================================================
Additional commitments for coal and for nuclear fuel will be required in the
future to supply the Company's fuel needs.
Purchase Power Commitments
In connection with the joint ownership arrangement for Plant Vogtle, discussed
in Note 6, the Company has made commitments to purchase declining fractions of
OPC's and MEAG's capacity and energy from this plant. These commitments are in
effect during periods of up to 10 years following commercial operation (and with
regard to a portion of a 5 percent interest in Plant Vogtle owned by MEAG, until
the latter of the retirement of the plant or the latest stated maturity date of
MEAG's bonds issued to finance such ownership interest). The payments for
capacity are required whether or not any capacity is available. The energy cost
is a function of each unit's variable operating costs. Except as noted below,
the cost of such capacity and energy is included in purchased power from
non-affiliates in the Company's Statements of Income. Capacity payments totaled
$76 million, $129 million and $183 million in 1995, 1994, and 1993,
respectively. The current projected Plant Vogtle capacity payments for the next
five years are: $70 million in 1996, $59 million per year in 1997 through 1999,
and $60 million in 2000. Portions of the payments noted above relate to costs in
excess of Plant Vogtle's allowed investment for ratemaking purposes. The present
value of these portions was written off in 1987 and 1990.
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<PAGE>
NOTES (continued)
Georgia Power Company 1995 Annual Report
As discussed in Note 3, the Plant Vogtle declining capacity buyback expense
is being levelized over a six-year period which began in October 1991.
The Company and an affiliate, Alabama Power Company, own equally all of the
outstanding capital stock of Southern Electric Generating Company (SEGCO), which
owns electric generating units with a total rated capacity of 1,020 megawatts,
as well as associated transmission facilities. The capacity of the units has
been sold equally to the Company and Alabama Power under a contract which, in
substance, requires payments sufficient to provide for the operating expenses,
taxes, debt service and return on investment, whether or not SEGCO has any
capacity and energy available. The term of the contract extends automatically
for two-year periods, subject to either party's right to cancel upon two year's
notice. The Company's share of expenses included in purchased power from
affiliates in the Statements of Income, is as follows:
1995 1994 1993
---------------------------------
(in millions)
Energy $44 $43 $60
Capacity 29 33 30
==============================================================
Total $73 $76 $90
==============================================================
Kilowatt-hours 2,391 2,429 3,352
- - --------------------------------------------------------------
At December 31, 1995, the capitalization of SEGCO consisted of $54 million
of equity and $78 million of long-term debt on which the annual interest
requirement is $5 million.
The Company has entered into a 30-year purchase power agreement, scheduled to
begin in June 1998, for electricity during peaking periods from a planned 300
megawatt cogeneration facility. Payments are subject to reductions for failure
to meet minimum capacity output. Total estimated capacity and fixed operation
and maintenance (O&M) payments are as follows:
Fixed
Year Capacity O&M Total
-----------------------------------------
(in millions)
1998 $ 10 $ 3 $ 13
1999 11 4 15
2000 11 4 15
2001 and beyond 178 157 335
================================================================
Total $210 $168 $378
================================================================
Operating Leases
The Company has entered into coal rail car rental agreements with various terms
and expiration dates. These expenses totaled $12 million, $13 million, and $8
million for 1995, 1994, and 1993, respectively. At December 31, 1995, estimated
minimum rental commitments for noncancelable operating leases were as follows:
Year Amounts
-------------------
(in millions)
1996 $ 11
1997 10
1998 10
1999 10
2000 10
2001 and beyond 126
=========================================================
Total minimum payments $177
=========================================================
5. NUCLEAR INSURANCE
Under the Price-Anderson Amendments Act of 1988, the Company maintains
agreements of indemnity with the NRC that, together with private insurance,
cover third-party liability arising from any nuclear incident
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<PAGE>
NOTES (continued)
Georgia Power Company 1995 Annual Report
occurring at the Company's nuclear power plants. The act provides funds up to
$8.9 billion for public liability claims that could arise from a single nuclear
incident. Each nuclear plant is insured against this liability to a maximum of
$200 million by private insurance, with the remaining coverage provided by a
mandatory program of deferred premiums that could be assessed, after a nuclear
incident, against all owners of nuclear reactors. The Company could be assessed
up to $79 million per incident for each licensed reactor it operates but not
more than an aggregate of $10 million per incident to be paid in a calendar year
for each reactor. Such maximum assessment for the Company, excluding any
applicable state premium taxes, -- based on its ownership and buyback interests
- - -- is $162 million per incident but not more than an aggregate of $20 million to
be paid for each incident in any one year.
The Company is a member of Nuclear Mutual Limited (NML), a mutual insurer
established to provide property damage insurance in an amount up to $500 million
for members' nuclear generating facilities. The members are subject to a
retrospective premium assessment in the event that losses exceed accumulated
reserve funds. The Company's maximum annual assessment is limited to $12 million
under current policies.
Additionally, the Company has policies that currently provide
decontamination, excess property insurance, and premature decommissioning
coverage up to $2.25 billion for losses in excess of the $500 million NML
coverage. This excess insurance is provided by Nuclear Electric Insurance
Limited (NEIL), a mutual insurance company.
NEIL also covers the additional costs that would be incurred in obtaining
replacement power during a prolonged accidental outage at a member's nuclear
plant. Members can be insured against increased costs of replacement power in an
amount up to $3.5 million per week -- starting 21 weeks after the outage -- for
one year and up to $2.8 million per week for the second and third years.
Under each of the NEIL policies, members are subject to assessments if
losses each year exceed the accumulated funds available to the insurer under
that policy. The maximum annual assessments under the current policies for the
Company would be $24 million for excess property damage and $13 million for
replacement power.
For all on-site property damage insurance policies for commercial nuclear
power plants, the NRC requires that the proceeds of such policies issued or
renewed on or after April 2, 1991, shall be dedicated first for the sole purpose
of placing the reactor in a safe and stable condition after an accident. Any
remaining proceeds are to be applied next toward the costs of decontamination
and debris removal operations ordered by the NRC, and any further remaining
proceeds are to be paid either to the Company or to its bond trustees as may be
appropriate under the policies and applicable trust indentures.
The Company participates in an insurance program for nuclear workers that
provides coverage for worker tort claims filed for bodily injury caused at
commercial nuclear power plants. In the event that claims for this insurance
exceed the accumulated reserve funds, the Company could be subject to a maximum
total assessment of $6 million.
All retrospective assessments, whether generated for liability, property or
replacement power, may be subject to applicable state premium taxes.
6. FACILITY SALES AND JOINT OWNERSHIP AGREEMENTS
The Company has sold undivided interests in plants Hatch, Wansley, Vogtle, and
Scherer Units 1 and 2, together with transmission facilities, to OPC, an
electric membership generation and transmission corporation; MEAG, a public
corporation and an instrumentality of the state of Georgia; and the City of
Dalton, Georgia. The Company has sold an interest in Plant Scherer Unit 3 to
Gulf Power Company, an affiliate.
Additionally, in 1995 the Company completed the last of four separate
transactions to sell Unit 4 of Plant Scherer to Florida Power & Light Company
(FP&L) and Jacksonville Electric Authority (JEA) for a total price of
approximately $808 million. FP&L now owns approximately 76.4 percent of the
unit, with JEA owning the remainder.
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NOTES (continued)
Georgia Power Company 1995 Annual Report
The Scherer Unit 4 transactions were as follows:
Closing Date Percent After-Tax
Capacity Ownership Amount Gain
- - ---------------------------------------------------------------
(in megawatts) (in millions)
July 1991 290 35.46% $291 $14
June 1993 258 31.44 253 18
June 1994 135 16.55 133 11
June 1995 135 16.55 131 12
===============================================================
Total 818 100.00% $808 $55
===============================================================
Except as otherwise noted, the Company has contracted to operate and
maintain all jointly owned facilities. The Company includes its proportionate
share of plant operating expenses in the corresponding operating expenses in the
Statements of Income.
As discussed in Note 3, the Company owns 25.4 percent of the Rocky Mountain
pumped storage hydroelectric plant, which began commercial operation in 1995.
OPC owns the remainder, and is the operator of the plant.
The Company owns six of eight 80 megawatt combustion turbine generating
units and 75 percent of the related common facilities at Plant McIntosh.
Savannah Electric and Power Company, an affiliate, owns the remainder and
operates the plant. Four of the Company's six units began commercial operation
during 1994, and the remaining two units began commercial operation in 1995.
In 1994, the Company and Florida Power Corporation (FPC) entered into a
joint ownership agreement regarding a 150 megawatt combustion turbine unit to be
constructed at Intercession City, Florida, near Orlando. The unit is scheduled
to begin commercial operation by the end of 1996, and will be constructed,
operated, and maintained by FPC. The Company will have a one-third interest in
the unit, with use of 100 percent of the unit's capacity from June through
September. FPC will have the capacity the remainder of the year. The Company's
investment in the project is expected to be approximately $14 million at
completion.
At December 31, 1995, the Company's percentage ownership and investment
(exclusive of nuclear fuel) in jointly owned facilities in commercial operation,
were as follows:
Total
Nameplate Company
Facility (Type) Capacity Ownership
- - -----------------------------------------------------------------
(megawatts)
Plant Vogtle (nuclear) 2,320 45.7%
Plant Hatch (nuclear) 1,630 50.1
Plant Wansley (coal) 1,779 53.5
Plant Scherer (coal)
Units 1 and 2 1,636 8.4
Unit 3 818 75.0
Plant McIntosh
Common Facilities N/A 75.0
(combustion-turbine)
Rocky Mountain 848 25.4
(pumped storage)
- - -----------------------------------------------------------------
Accumulated
Facility (Type) Investment Depreciation
- - -----------------------------------------------------------------
(in millions)
Plant Vogtle (nuclear) $3,295* $730
Plant Hatch (nuclear) 842 394
Plant Wansley (coal) 297 132
Plant Scherer (coal)
Units 1 and 2 112 39
Unit 3 541 135
Plant McIntosh
Common Facilities
(combustion-turbine) 19 **
Rocky Mountain
(pumped storage) 200 10
- - ----------------------------------------------------------------
* Investment net of write-offs.
** Less than $1 million.
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NOTES (continued)
Georgia Power Company 1995 Annual Report
7. LONG-TERM POWER SALES AGREEMENTS
The Company and the operating subsidiaries of The Southern Company have
long-term contractual agreements for the sale of capacity and energy to
non-affiliated utilities located outside the system's service area. These
agreements consist of firm unit power sales pertaining to capacity from specific
generating units. The Company also had agreements for non-firm sales, which
expired in 1994, based on the capacity of the Southern system. Because energy is
generally sold at cost under these agreements, it is primarily the capacity
revenues that affect the Company's profitability.
The Company's capacity revenues have been as follows:
Year Unit Power Sales Non-firm Sales
- - -----------------------------------------------------------------
(in millions) (megawatts) (in millions) (megawatts)
1995 $ 53 248 $ - -
1994 75 403 9 101
1993 135 830 17 200
- - -----------------------------------------------------------------
Unit power from specific generating plants is being sold to FP&L, FPC, JEA,
and the City of Tallahassee, Florida. Under these agreements, the Company sold
approximately 248 megawatts of capacity in 1995 and is scheduled to sell
approximately 173 megawatts of capacity in 1996. Thereafter, these sales will
decline to an estimated 159 megawatts and remain at that level through 1999.
After 2000, capacity sales will decline to approximately 103 megawatts -- unless
reduced by FP&L, FPC, and JEA -- until the expiration of the contracts in 2010.
Long-term non-firm power of 200 megawatts was sold by the Southern
system in 1994 to FPC, of which the Company's share was 101 megawatts, under a
contract that expired at the end of 1994. Sales under these long-term non-firm
power sales agreements were made from available power pool energy, and the
revenues from the sales were shared by the operating affiliates.
8. INCOME TAXES
Effective January 1, 1993, the Company adopted FASB Statement No. 109,
Accounting for Income Taxes. The adoption resulted in the recording of
additional deferred income taxes and related regulatory assets and liabilities.
At December 31, 1995, the tax-related regulatory assets were $872 million and
the tax-related regulatory liabilities were $410 million. The assets are
attributable to tax benefits flowed through to customers in prior years and to
taxes applicable to capitalized AFUDC. The liabilities are attributable to
deferred taxes previously recognized at rates higher than current enacted tax
law and to unamortized investment tax credits.
Details of the federal and state income tax provisions are as follows:
1995 1994 1993
------------------------------
Total provision for income taxes: (in millions)
Federal:
Currently payable $349 $306 $223
Deferred -
Current year 84 86 181
Reversal of prior years (55) (57) (40)
Deferred investment tax
credits 1 (1) (18)
- - -----------------------------------------------------------------
379 334 346
- - -----------------------------------------------------------------
State:
Currently payable 60 52 41
Deferred -
Current year 15 15 31
Reversal of prior years (8) (10) (3)
- - -----------------------------------------------------------------
67 57 69
- - -----------------------------------------------------------------
Total 446 391 415
- - ------------------------------------------------------------------
Less:
Income taxes charged
(credited) to other income (3) (8) (37)
=================================================================
Federal and state income
taxes charged to operations $449 $399 $452
=================================================================
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NOTES (continued)
Georgia Power Company 1995 Annual Report
The tax effects of temporary differences between the carrying amounts of
assets and liabilities in the financial statements and their respective tax
bases, which give rise to deferred tax assets and liabilities, are as follows:
1995 1994
--------------------
(in millions)
Deferred tax liabilities:
Accelerated depreciation $1,630 $1,541
Property basis differences 1,074 1,085
Deferred Plant Vogtle costs 100 141
Premium on reacquired debt 70 68
Deferred regulatory costs 38 48
Fuel clause underrecovered - 9
Other 29 23
- - ------------------------------------------------------------------
Total 2,941 2,915
- - ------------------------------------------------------------------
Deferred tax assets:
Other property basis differences 239 250
Federal effect of state deferred taxes 97 94
Other deferred costs 83 79
Disallowed Plant Vogtle buybacks 25 26
Accrued interest 13 10
Fuel clause overrecovered 6 -
Other 18 13
- - ------------------------------------------------------------------
Total 481 472
- - ------------------------------------------------------------------
Net deferred tax liabilities 2,460 2,443
Portion included in current assets 51 35
==================================================================
Accumulated deferred income taxes
in the Balance Sheets $2,511 $2,478
==================================================================
Deferred investment tax credits are amortized over the life of the related
property with such amortization normally applied as a credit to reduce
depreciation in the Statements of Income. Credits amortized in this manner
amounted to $22 million in 1995, $25 million in 1994, and $19 million in 1993.
At December 31, 1995, all investment tax credits available to reduce federal
income taxes payable had been utilized.
A reconciliation of the federal statutory tax rate to the effective income
tax rate is as follows:
1995 1994 1993
-----------------------------
Federal statutory rate 35% 35% 35%
State income tax, net of
federal deduction 4 4 4
Non-deductible book
depreciation 2 3 3
Difference in prior years'
deferred and current tax rate (1) (1) (1)
Other - - (1)
================================================================
Effective income tax rate 40% 41% 40%
================================================================
The Southern Company and its subsidiaries file a consolidated federal income
tax return. Under a joint consolidated income tax agreement, each subsidiary's
current and deferred tax expense is computed on a stand-alone basis. Tax
benefits from losses of the parent company are allocated to each subsidiary
based on the ratio of taxable income to total consolidated taxable income.
9. CAPITALIZATION
Common Stock Dividend Restrictions
The Company's first mortgage bond indenture contains various common stock
dividend restrictions that remain in effect as long as the bonds are
outstanding. At December 31, 1995, retained earnings of $897 million were
restricted against the payment of cash dividends on common stock under terms of
the mortgage indenture. Supplemental indentures in connection with future first
mortgage bond issues may contain more stringent common stock dividend
restrictions than those currently in effect.
The Company's charter limits cash dividends on common stock to the lesser of
the retained earnings balance or 75 percent of net income available for such
stock during a prior period of 12 months if the ratio of common stock equity to
total capitalization, including retained earnings, adjusted to reflect the
payment of the proposed dividend, is below 25 percent, and to 50 percent of such
net income if such ratio is less than 20 percent. At December 31, 1995, the
ratio as defined was 50.2 percent.
II-123
<PAGE>
NOTES (continued)
Georgia Power Company 1995 Annual Report
Preferred Securities
In December 1994, Georgia Power Capital, L.P., of which the Company is the sole
general partner, issued $100 million of 9 percent mandatory redeemable preferred
securities. The sole asset of Georgia Power Capital is $103 million aggregate
principal amount of Georgia Power's 9 percent Junior Subordinated Deferrable
Interest Debentures due December 19, 2024. The Company considers that the
mechanisms and obligations relating to the preferred securities, taken together,
constitute a full and unconditional guarantee by the Company of Georgia Power
Capital's payment obligations with respect to the preferred securities.
Pollution Control Bonds
The Company has incurred obligations in connection with the sale by public
authorities of tax-exempt pollution control and industrial development revenue
bonds. The Company has authenticated and delivered to trustees an aggregate of
$1.5 billion of its first mortgage bonds, which are pledged as security for its
obligations under pollution control and industrial development contracts. No
interest on these first mortgage bonds is payable unless and until a default
occurs on the installment purchase or loan agreements. An aggregate of
approximately $146 million of the pollution control and industrial development
bonds is secured by a subordinated interest in specific property of the Company.
Details of pollution control bonds are as follows:
Maturity Interest Rates 1995 1994
- - --------------------------------------------------------------
(in millions)
2000 4.375% $ 50 $ -
2004-2005 5% to 5.70% 143 85
2006-2008 6.375% to 6.75% 12 12
2011-2015 10.125% to 10.6%
& Variable 10 515
2016-2019 6% to 9.375% 282 282
2021-2025 5.40% to 7.25%
& Variable 1,181 784
==============================================================
Total pollution control bonds $ 1,678 $1,678
==============================================================
Bank Credit Arrangements
At the beginning of 1996, the Company had unused credit arrangements with banks
totaling $975 million, of which $514.7 million expires at various times during
1996, $60.3 million expires at May 1, 1998, and $400 million expires at June 30,
1998.
The $400 million expiring June 30, 1998, is under revolving credit
arrangements with several banks providing the Company, Alabama Power Company,
and The Southern Company up to a total credit amount of $400 million. To provide
liquidity support for commercial paper programs, $165 million, $135 million, and
$100 million are currently dedicated to the Company, Alabama Power Company, and
The Southern Company, respectively. However, the allocations can be changed
among the borrowers by notifying the respective banks.
During the term of the agreements expiring in 1998, short-term borrowings
may be converted into term loans, payable in 12 equal quarterly installments,
with the first installment due at the end of the first calendar quarter after
the applicable termination date or at an earlier date at the companies' option.
In addition, these agreements require payment of commitment fees based on the
unused portions of the commitments or the maintenance of compensating balances
with the banks.
Of the Company's total $975 million in unused credit arrangements, a portion
of the lines are dedicated to provide liquidity support to variable rate
pollution control bonds. The credit lines dedicated as of December 31, 1995,
were $475 million. In connection with all other lines of credit, the Company has
the option of paying fees or maintaining compensating balances. These balances
are not legally restricted from withdrawal.
In addition, the Company borrows under uncommitted lines of credit with
banks and through a $225 million commercial paper program that has the liquidity
support of committed bank credit arrangements. Average compensating balances
held under these committed facilities were not material in 1995.
Other Long-Term Debt
Assets acquired under capital leases are recorded in the Balance Sheets as
utility plant in service, and the related obligations are classified as
II-124
<PAGE>
NOTES (continued)
Georgia Power Company 1995 Annual Report
long-term debt. At December 31, 1995 and 1994, the Company had a capitalized
lease obligation for its corporate headquarters building of $87 million and $88
million, respectively, with an interest rate of 8.1 percent. The maturity of
this capital lease obligation through 2000 is approximately as follows: $336
thousand in 1996, $365 thousand in 1997, $395 thousand in 1998, $429 thousand in
1999, and $672 thousand in 2000.
The lease agreement for the corporate headquarters building provides for
payments that are minimal in early years and escalate through the first 21 years
of the lease. For ratemaking purposes, the GPSC has treated the lease as an
operating lease and has allowed only the lease payments in cost of service. The
difference between the accrued expense and the lease payments allowed for
ratemaking purposes is being deferred as a cost to be recovered in the future as
ordered by the GPSC. At December 31, 1995, and 1994, the interest and lease
amortization deferred on the Balance Sheets are $49 million and $48 million,
respectively.
Assets Subject to Lien
The Company's mortgage dated as of March 1, 1941, as amended and supplemented,
securing the first mortgage bonds issued by the Company, constitutes a direct
lien on substantially all of the Company's fixed property and franchises.
Long-Term Debt Due Within One Year
The current portion of the Company's long-term debt is as follows:
1995 1994
-----------------
(in millions)
First mortgage bond maturity $150 $130
Other long-term debt - 37
================================================================
Total $150 $167
================================================================
The Company's first mortgage bond indenture includes an improvement fund
requirement that amounts to 1 percent of each outstanding series of bonds
authenticated under the indenture prior to January 1 of each year, other than
those issued to collateralize pollution control obligations. The requirement may
be satisfied by June 1 of each year by depositing cash, reacquiring bonds, or by
pledging additional property equal to 1 2/3 times the requirement. The Company
currently plans to satisfy its 1996 improvement fund requirement by depositing
cash with the trustee or by pledging additional property.
Redemption of Securities
The Company plans to continue a program of redeeming or replacing debt and
preferred stock in cases where opportunities exist to reduce financing costs.
Issues may be repurchased in the open market or called at premiums as specified
under terms of the issue. They may also be redeemed at face value to meet
improvement fund and sinking fund requirements, to meet replacement provisions
of the mortgage, or through use of proceeds from the sale of property pledged
under the mortgage. In general, for the first five years a series is outstanding
the Company is prohibited from redeeming for improvement fund purposes more than
1 percent annually of the original issue amount.
10. QUARTERLY FINANCIAL DATA (UNAUDITED)
Summarized quarterly financial information for 1995 and 1994 is as follows:
Net Income
After
Dividends on
Operating Operating Preferred
Quarter Ended Revenues Income Stock
- - -------------------------------------------------------------------
(in millions)
March 1995 $ 974 $207 $ 116
June 1995 1,075 230 149
September 1995 1,374 337 245
December 1995 982 177 99
March 1994 $ 992 $157 $ 58
June 1994 1,030 227 140
September 1994 1,213 331 233
December 1994 927 179 95
- - -------------------------------------------------------------------
Earnings in 1994 declined by $55 million as a result of work force reduction
programs recorded primarily in the first quarter.
The Company's business is influenced by seasonal weather conditions.
II-125
<PAGE>
<TABLE>
<CAPTION>
SELECTED FINANCIAL AND OPERATING DATA
Georgia Power Company 1995 Annual Report
- - ----------------------------------------------------------------------------------------------------------------------------------
1995 1994 1993
- - ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating Revenues (in thousands) $4,405,338 $4,162,403 $4,451,181
Net Income after Dividends
on Preferred Stock (in thousands) $608,862 $525,544 $569,853
Cash Dividends on Common Stock (in thousands) $451,500 $429,300 $402,400
Return on Average Common Equity (percent) 14.43 12.84 14.37
Total Assets (in thousands) $13,470,275 $13,712,658 $13,736,110
Gross Property Additions (in thousands) $480,449 $638,426 $674,432
- - ----------------------------------------------------------------------------------------------------------------------------------
Capitalization (in thousands):
Common stock equity $4,299,012 $4,141,554 $4,045,458
Preferred stock 692,787 692,787 692,787
Preferred stock subject to mandatory redemption - - -
Subsidiary obligated mandatorily redeemable preferred securities 100,000 100,000 -
Long-term debt 3,315,460 3,757,823 4,031,387
- - ----------------------------------------------------------------------------------------------------------------------------------
Total (excluding amounts due within one year) $8,407,259 $8,692,164 $8,769,632
==================================================================================================================================
Capitalization Ratios (percent):
Common stock equity 51.1 47.6 46.1
Preferred stock 8.2 8.0 7.9
Subsidiary obligated mandatorily redeemable preferred securities 1.2 1.2 -
Long-term debt 39.5 43.2 46.0
- - ----------------------------------------------------------------------------------------------------------------------------------
Total (excluding amounts due within one year) 100.0 100.0 100.0
==================================================================================================================================
First Mortgage Bonds (in thousands):
Issued 75,000 - 1,135,000
Retired 505,789 133,559 1,337,822
Preferred Stock (in thousands):
Issued - - 175,000
Retired - - 245,005
Subsidiary Obligated Mandatorily Redeemable Preferred Securities (in thousands):
Issued - 100,000 -
- - ----------------------------------------------------------------------------------------------------------------------------------
Security Ratings:
First Mortgage Bonds -
Moody's A1 A2 A3
Standard and Poor's A+ A A-
Duff & Phelps AA- A+ A+
Preferred Stock -
Moody's a2 a3 baa1
Standard and Poor's A A- BBB+
Duff & Phelps A A- A-
- - ----------------------------------------------------------------------------------------------------------------------------------
Customers (year-end):
Residential 1,500,024 1,466,382 1,441,972
Commercial 198,624 193,648 188,820
Industrial 10,796 10,976 11,217
Other 2,568 2,426 2,322
- - ----------------------------------------------------------------------------------------------------------------------------------
Total 1,712,012 1,673,432 1,644,331
==================================================================================================================================
Employees (year-end) 11,061 11,765 12,528
</TABLE>
II-126
<PAGE>
<TABLE>
<CAPTION>
SELECTED FINANCIAL AND OPERATING DATA
Georgia Power Company 1995 Annual Report
- - ----------------------------------------------------------------------------------------------------------------------------------
1992 1991 1990
- - ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating Revenues (in thousands) $4,297,436 $4,301,428 $4,445,809
Net Income after Dividends
on Preferred Stock (in thousands) $520,538 $474,855 $208,066
Cash Dividends on Common Stock (in thousands) $384,000 $375,200 $389,600
Return on Average Common Equity (percent) 13.60 12.76 5.52
Total Assets (in thousands) $10,964,442 $10,842,538 $11,176,619
Gross Property Additions (in thousands) $508,444 $548,051 $558,727
- - ----------------------------------------------------------------------------------------------------------------------------------
Capitalization (in thousands):
Common stock equity $3,888,237 $3,766,551 $3,673,913
Preferred stock 692,792 607,796 607,796
Preferred stock subject to mandatory redemption 6,250 118,750 125,000
Subsidiary obligated mandatorily redeemable preferred securities - - -
Long-term debt 4,131,016 4,553,189 5,000,225
- - ----------------------------------------------------------------------------------------------------------------------------------
Total (excluding amounts due within one year) $8,718,295 $9,046,286 $9,406,934
==================================================================================================================================
Capitalization Ratios (percent):
Common stock equity 44.6 41.7 39.1
Preferred stock 8.0 8.0 7.8
Subsidiary obligated mandatorily redeemable preferred securities - - -
Long-term debt 47.4 50.3 53.1
- - ----------------------------------------------------------------------------------------------------------------------------------
Total (excluding amounts due within one year) 100.0 100.0 100.0
==================================================================================================================================
First Mortgage Bonds (in thousands):
Issued 975,000 - 300,000
Retired 1,381,300 598,384 91,117
Preferred Stock (in thousands):
Issued 195,000 100,000 -
Retired 165,004 100,000 83,750
Subsidiary Obligated Mandatorily Redeemable Preferred Securities (in thousands):
Issued - - -
- - ----------------------------------------------------------------------------------------------------------------------------------
Security Ratings:
First Mortgage Bonds -
Moody's A3 Baa1 Baa1
Standard and Poor's A- BBB+ BBB+
Duff & Phelps A- BBB+ BBB
Preferred Stock -
Moody's baa1 baa1 baa1
Standard and Poor's BBB+ BBB BBB
Duff & Phelps BBB BBB- BBB-
- - ----------------------------------------------------------------------------------------------------------------------------------
Customers (year-end):
Residential 1,421,175 1,397,682 1,378,888
Commercial 183,784 179,933 178,391
Industrial 11,479 11,946 12,115
Other 2,269 2,190 2,114
- - ----------------------------------------------------------------------------------------------------------------------------------
Total 1,618,707 1,591,751 1,571,508
==================================================================================================================================
Employees (year-end) 12,600 13,700 13,746
</TABLE>
II-127A
<PAGE>
<TABLE>
<CAPTION>
SELECTED FINANCIAL AND OPERATING DATA
Georgia Power Company 1995 Annual Report
- - ----------------------------------------------------------------------------------------------------------------------------------
1989 1988 1987
- - ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating Revenues (in thousands) $4,145,240 $3,897,479 $3,786,485
Net Income after Dividends
on Preferred Stock (in thousands) $449,099 $479,532 $240,057
Cash Dividends on Common Stock (in thousands) $394,500 $386,600 $377,800
Return on Average Common Equity (percent) 11.72 13.06 6.85
Total Assets (in thousands) $11,372,346 $11,130,539 $11,197,494
Gross Property Additions (in thousands) $727,631 $929,019 $1,034,059
- - ----------------------------------------------------------------------------------------------------------------------------------
Capitalization (in thousands):
Common stock equity $3,860,657 $3,806,070 $3,538,182
Preferred stock 607,844 657,844 657,844
Preferred stock subject to mandatory redemption 155,000 162,500 166,250
Subsidiary obligated mandatorily redeemable preferred securities - - -
Long-term debt 5,054,001 4,861,378 4,825,760
- - ----------------------------------------------------------------------------------------------------------------------------------
Total (excluding amounts due within one year) $9,677,502 $9,487,792 $9,188,036
==================================================================================================================================
Capitalization Ratios (percent):
Common stock equity 39.9 40.1 38.5
Preferred stock 7.9 8.6 9.0
Subsidiary obligated mandatorily redeemable preferred securities - - -
Long-term debt 52.2 51.3 52.5
- - ----------------------------------------------------------------------------------------------------------------------------------
Total (excluding amounts due within one year) 100.0 100.0 100.0
==================================================================================================================================
First Mortgage Bonds (in thousands):
Issued 250,000 150,000 500,000
Retired 91,516 206,677 217,949
Preferred Stock (in thousands):
Issued - - 125,000
Retired 7,500 3,750 150,000
Subsidiary Obligated Mandatorily Redeemable Preferred Securities (in thousands):
Issued - - -
- - ----------------------------------------------------------------------------------------------------------------------------------
Security Ratings:
First Mortgage Bonds -
Moody's Baa2 Baa2 Baa2
Standard and Poor's BBB+ BBB BBB
Duff & Phelps BBB 9 9
Preferred Stock -
Moody's baa2 baa2 baa2
Standard and Poor's BBB BBB- BBB-
Duff & Phelps BBB- 10 10
- - ----------------------------------------------------------------------------------------------------------------------------------
Customers (year-end):
Residential 1,355,211 1,329,173 1,303,721
Commercial 177,814 174,147 169,014
Industrial 12,311 12,353 12,307
Other 2,050 1,993 1,858
- - ----------------------------------------------------------------------------------------------------------------------------------
Total 1,547,386 1,517,666 1,486,900
==================================================================================================================================
Employees (year-end) 13,900 15,110 14,924
</TABLE>
II-127B
<PAGE>
<TABLE>
<CAPTION>
SELECTED FINANCIAL AND OPERATING DATA
Georgia Power Company 1995 Annual Report
- - -----------------------------------------------------------------------------------------------------------------------
1986 1985
- - -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operating Revenues (in thousands) $3,561,603 $3,609,140
Net Income after Dividends
on Preferred Stock (in thousands) $535,003 $493,717
Cash Dividends on Common Stock (in thousands) $325,500 $277,500
Return on Average Common Equity (percent) 16.51 17.95
Total Assets (in thousands) $10,465,063 $9,030,618
Gross Property Additions (in thousands) $1,598,309 $1,384,182
- - -----------------------------------------------------------------------------------------------------------------------
Capitalization (in thousands):
Common stock equity $3,469,201 $3,013,707
Preferred stock 732,844 632,844
Preferred stock subject to mandatory redemption 112,500 120,000
Subsidiary obligated mandatorily redeemable preferred securities - -
Long-term debt 4,464,857 3,878,066
- - -----------------------------------------------------------------------------------------------------------------------
Total (excluding amounts due within one year) $8,779,402 $7,644,617
=======================================================================================================================
Capitalization Ratios (percent):
Common stock equity 39.5 39.4
Preferred stock 9.6 9.9
Subsidiary obligated mandatorily redeemable preferred securities - -
Long-term debt 50.9 50.7
- - -----------------------------------------------------------------------------------------------------------------------
Total (excluding amounts due within one year) 100.0 100.0
=======================================================================================================================
First Mortgage Bonds (in thousands):
Issued 500,000 -
Retired 377,538 17,738
Preferred Stock (in thousands):
Issued 100,000 150,000
Retired 7,500 3,750
Subsidiary Obligated Mandatorily Redeemable Preferred Securities (in thousands):
Issued - -
- - -----------------------------------------------------------------------------------------------------------------------
Security Ratings:
First Mortgage Bonds -
Moody's Baa1 Baa1
Standard and Poor's BBB+ BBB+
Duff & Phelps 9 9
Preferred Stock -
Moody's baa1 baa1
Standard and Poor's BBB BBB
Duff & Phelps 10 10
- - -----------------------------------------------------------------------------------------------------------------------
Customers (year-end):
Residential 1,268,983 1,231,140
Commercial 162,258 155,399
Industrial 12,315 12,309
Other 1,816 1,789
- - -----------------------------------------------------------------------------------------------------------------------
Total 1,445,372 1,400,637
=======================================================================================================================
Employees (year-end) 14,773 14,947
</TABLE>
II-127C
<PAGE>
<TABLE>
<CAPTION>
SELECTED FINANCIAL AND OPERATING DATA (continued)
Georgia Power Company 1995 Annual Report
- - ----------------------------------------------------------------------------------------------------------------------------------
1995 1994 1993
- - ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating Revenues (in thousands):
Residential $1,337,060 $1,180,358 $1,291,035
Commercial 1,449,108 1,367,315 1,354,130
Industrial 1,141,766 1,100,995 1,113,067
Other 44,255 42,983 41,399
- - ----------------------------------------------------------------------------------------------------------------------------------
Total retail 3,972,189 3,691,651 3,799,631
Sales for resale - non-affiliates 290,302 351,591 534,370
Sales for resale - affiliates 76,906 60,899 61,668
- - ----------------------------------------------------------------------------------------------------------------------------------
Total revenues from sales of electricity 4,339,397 4,104,141 4,395,669
Other revenues 65,941 58,262 55,512
- - ----------------------------------------------------------------------------------------------------------------------------------
Total $4,405,338 $4,162,403 $4,451,181
==================================================================================================================================
Kilowatt-Hour Sales (in thousands):
Residential 17,307,399 15,680,709 16,649,859
Commercial 19,844,999 18,738,461 18,278,508
Industrial 25,286,340 24,337,632 23,635,363
Other 493,720 484,009 460,801
- - ----------------------------------------------------------------------------------------------------------------------------------
Total retail 62,932,458 59,240,811 59,024,531
Sales for resale - non-affiliates 6,591,841 7,968,475 14,307,030
Sales for resale - affiliates 2,738,947 3,056,050 3,027,733
- - ----------------------------------------------------------------------------------------------------------------------------------
Total 72,263,246 70,265,336 76,359,294
==================================================================================================================================
Average Revenue Per Kilowatt-Hour (cents):
Residential 7.73 7.53 7.75
Commercial 7.30 7.30 7.41
Industrial 4.52 4.52 4.71
Total retail 6.31 6.23 6.44
Sales for resale 3.94 3.74 3.44
Total sales 6.00 5.84 5.76
Residential Average Annual Kilowatt-Hour Use Per Customer 11,654 10,766 11,630
Residential Average Annual Revenue Per Customer $900.28 $810.39 $901.79
Plant Nameplate Capacity Ratings (year-end) (megawatts) 14,344 13,943 13,759
Maximum Peak-Hour Demand (megawatts) (Note):
Winter 9,819 10,509 9,067
Summer 12,828 11,758 12,573
Annual Load Factor (percent) 59.6 63.0 58.5
Plant Availability (percent):
Fossil-steam 85.8 83.1 85.9
Nuclear 91.8 88.4 85.5
- - ----------------------------------------------------------------------------------------------------------------------------------
Source of Energy Supply (percent):
Coal 63.0 61.3 62.1
Nuclear 19.3 18.0 16.2
Hydro 2.5 2.6 2.3
Oil and gas 0.6 0.1 0.2
Purchased power -
From non-affiliates 7.7 9.7 10.2
From affiliates 6.9 8.3 9.0
- - ----------------------------------------------------------------------------------------------------------------------------------
Total 100.0 100.0 100.0
==================================================================================================================================
Total Fuel Economy Data:
BTU per net kilowatt-hour generated 10,039 9,915 9,912
Cost of fuel per million BTU (cents) 143.85 145.33 153.62
Average cost of fuel per net kilowatt-hour generated (cents) 1.44 1.44 1.52
==================================================================================================================================
Note: As of 9/1/91, Georgia Power Company's sales to Oglethorpe Power Company are not included in Peak-Hour Demand.
* Less than one-tenth of one percent.
</TABLE>
II-128
<PAGE>
<TABLE>
<CAPTION>
SELECTED FINANCIAL AND OPERATING DATA (continued)
Georgia Power Company 1995 Annual Report
- - ----------------------------------------------------------------------------------------------------------------------------------
1992 1991 1990
- - ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating Revenues (in thousands):
Residential $1,128,396 $1,111,358 $1,109,165
Commercial 1,285,681 1,243,067 1,218,441
Industrial 1,083,856 1,057,702 1,061,830
Other 39,504 37,861 36,773
- - ----------------------------------------------------------------------------------------------------------------------------------
Total retail 3,537,437 3,449,988 3,426,209
Sales for resale - non-affiliates 640,308 736,643 784,086
Sales for resale - affiliates 67,835 65,586 168,251
- - ----------------------------------------------------------------------------------------------------------------------------------
Total revenues from sales of electricity 4,245,580 4,252,217 4,378,546
Other revenues 51,856 49,211 67,263
- - ----------------------------------------------------------------------------------------------------------------------------------
Total $4,297,436 $4,301,428 $4,445,809
==================================================================================================================================
Kilowatt-Hour Sales (in thousands):
Residential 14,939,172 14,815,089 14,771,648
Commercial 17,260,614 16,885,833 16,627,128
Industrial 22,978,312 22,298,062 22,126,604
Other 436,144 429,016 428,459
- - ----------------------------------------------------------------------------------------------------------------------------------
Total retail 55,614,242 54,428,000 53,953,839
Sales for resale - non-affiliates 15,870,222 18,719,924 20,158,681
Sales for resale - affiliates 3,320,060 3,885,892 8,272,528
- - ----------------------------------------------------------------------------------------------------------------------------------
Total 74,804,524 77,033,816 82,385,048
==================================================================================================================================
Average Revenue Per Kilowatt-Hour (cents):
Residential 7.55 7.50 7.51
Commercial 7.45 7.36 7.33
Industrial 4.72 4.74 4.80
Total retail 6.36 6.34 6.35
Sales for resale 3.69 3.55 3.35
Total sales 5.68 5.52 5.31
Residential Average Annual Kilowatt-Hour Use Per Customer 10,603 10,675 10,795
Residential Average Annual Revenue Per Customer $800.88 $800.78 $810.56
Plant Nameplate Capacity Ratings (year-end) (megawatts) 14,076 14,076 14,366
Maximum Peak-Hour Demand (megawatts) (Note):
Winter 8,938 10,001 8,977
Summer 11,448 13,090 13,196
Annual Load Factor (percent) 60.5 55.2 55.5
Plant Availability (percent):
Fossil-steam 86.6 93.3 92.5
Nuclear 87.7 81.6 81.3
- - ----------------------------------------------------------------------------------------------------------------------------------
Source of Energy Supply (percent):
Coal 61.4 63.6 65.1
Nuclear 17.0 15.3 13.7
Hydro 2.5 2.3 2.2
Oil and gas * * 0.1
Purchased power -
From non-affiliates 12.2 10.3 11.0
From affiliates 6.9 8.5 7.9
- - ----------------------------------------------------------------------------------------------------------------------------------
Total 100.0 100.0 100.0
==================================================================================================================================
Total Fuel Economy Data:
BTU per net kilowatt-hour generated 9,900 9,960 9,939
Cost of fuel per million BTU (cents) 153.08 157.97 166.22
Average cost of fuel per net kilowatt-hour generated (cents) 1.52 1.57 1.65
==================================================================================================================================
Note: As of 9/1/91, Georgia Power Company's sales to Oglethorpe Power Company are not included in Peak-Hour Demand.
* Less than one-tenth of one percent.
</TABLE>
II-129A
<PAGE>
<TABLE>
<CAPTION>
SELECTED FINANCIAL AND OPERATING DATA (continued)
Georgia Power Company 1995 Annual Report
- - --------------------------------------------------------------------------------------------------------------------------------
1989 1988 1987
- - --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating Revenues (in thousands):
Residential $1,022,781 $979,047 $904,218
Commercial 1,143,727 1,054,995 915,540
Industrial 1,006,416 983,822 911,933
Other 34,775 31,743 29,350
- - --------------------------------------------------------------------------------------------------------------------------------
Total retail 3,207,699 3,049,607 2,761,041
Sales for resale - non-affiliates 760,809 707,076 822,696
Sales for resale - affiliates 150,394 86,751 159,998
- - --------------------------------------------------------------------------------------------------------------------------------
Total revenues from sales of electricity 4,118,902 3,843,434 3,743,735
Other revenues 26,338 54,045 42,750
- - --------------------------------------------------------------------------------------------------------------------------------
Total $4,145,240 $3,897,479 $3,786,485
================================================================================================================================
Kilowatt-Hour Sales (in thousands):
Residential 14,134,195 13,800,038 13,675,730
Commercial 15,843,181 14,790,561 13,799,379
Industrial 21,801,404 21,412,845 20,884,454
Other 414,107 397,669 385,514
- - --------------------------------------------------------------------------------------------------------------------------------
Total retail 52,192,887 50,401,113 48,745,077
Sales for resale - non-affiliates 20,479,412 18,544,705 20,910,185
Sales for resale - affiliates 7,489,948 3,327,814 6,032,889
- - --------------------------------------------------------------------------------------------------------------------------------
Total 80,162,247 72,273,632 75,688,151
================================================================================================================================
Average Revenue Per Kilowatt-Hour (cents):
Residential 7.24 7.09 6.61
Commercial 7.22 7.13 6.63
Industrial 4.62 4.59 4.37
Total retail 6.15 6.05 5.66
Sales for resale 3.26 3.63 3.65
Total sales 5.14 5.32 4.95
Residential Average Annual Kilowatt-Hour Use Per Customer 10,530 10,484 10,623
Residential Average Annual Revenue Per Customer $761.96 $743.82 $702.36
Plant Nameplate Capacity Ratings (year-end) (megawatts) 14,366 13,018 13,018
Maximum Peak-Hour Demand (megawatts) (Note):
Winter 10,101 9,866 9,446
Summer 12,735 12,295 12,390
Annual Load Factor (percent) 56.3 59.1 56.1
Plant Availability (percent):
Fossil-steam 93.0 94.5 92.7
Nuclear 89.2 69.4 85.4
- - --------------------------------------------------------------------------------------------------------------------------------
Source of Energy Supply (percent):
Coal 64.0 72.0 70.9
Nuclear 14.1 9.6 9.1
Hydro 2.1 1.2 1.7
Oil and gas 0.1 0.1 0.1
Purchased power -
From non-affiliates 10.2 8.2 8.5
From affiliates 9.5 8.9 9.7
- - --------------------------------------------------------------------------------------------------------------------------------
Total 100.0 100.0 100.0
================================================================================================================================
Total Fuel Economy Data:
BTU per net kilowatt-hour generated 10,020 9,969 9,932
Cost of fuel per million BTU (cents) 164.27 166.28 168.81
Average cost of fuel per net kilowatt-hour generated (cents) 1.65 1.66 1.68
================================================================================================================================
Note: As of 9/1/91, Georgia Power Company's sales to Oglethorpe Power Company are not included in Peak-Hour Demand.
* Less than one-tenth of one percent.
</TABLE>
II-129B
<PAGE>
<TABLE>
<CAPTION>
SELECTED FINANCIAL AND OPERATING DATA (continued)
Georgia Power Company 1995 Annual Report
- - -----------------------------------------------------------------------------------------------------------------------
1986 1985
- - -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operating Revenues (in thousands):
Residential $874,231 $786,500
Commercial 854,755 797,540
Industrial 897,646 873,554
Other 27,948 26,766
- - -----------------------------------------------------------------------------------------------------------------------
Total retail 2,654,580 2,484,360
Sales for resale - non-affiliates 780,049 941,743
Sales for resale - affiliates 91,753 149,463
- - -----------------------------------------------------------------------------------------------------------------------
Total revenues from sales of electricity 3,526,382 3,575,566
Other revenues 35,221 33,574
- - -----------------------------------------------------------------------------------------------------------------------
Total $3,561,603 $3,609,140
=======================================================================================================================
Kilowatt-Hour Sales (in thousands):
Residential 13,234,248 12,006,462
Commercial 12,945,926 11,945,938
Industrial 20,339,235 19,517,543
Other 381,917 382,238
- - -----------------------------------------------------------------------------------------------------------------------
Total retail 46,901,326 43,852,181
Sales for resale - non-affiliates 18,198,186 21,526,865
Sales for resale - affiliates 3,160,242 5,999,834
- - -----------------------------------------------------------------------------------------------------------------------
Total 68,259,754 71,378,880
=======================================================================================================================
Average Revenue Per Kilowatt-Hour (cents):
Residential 6.61 6.55
Commercial 6.60 6.68
Industrial 4.41 4.48
Total retail 5.66 5.67
Sales for resale 4.08 3.96
Total sales 5.17 5.01
Residential Average Annual Kilowatt-Hour Use Per Customer 10,577 9,923
Residential Average Annual Revenue Per Customer $698.72 $650.01
Plant Nameplate Capacity Ratings (year-end) (megawatts) 11,875 11,875
Maximum Peak-Hour Demand (megawatts) (Note):
Winter 10,551 10,049
Summer 11,910 11,079
Annual Load Factor (percent) 57.5 56.3
Plant Availability (percent):
Fossil-steam 91.2 91.2
Nuclear 64.7 79.5
- - -----------------------------------------------------------------------------------------------------------------------
Source of Energy Supply (percent):
Coal 74.6 72.7
Nuclear 5.0 6.7
Hydro 1.2 1.5
Oil and gas 0.6 *
Purchased power -
From non-affiliates 8.9 9.4
From affiliates 9.7 9.7
- - -----------------------------------------------------------------------------------------------------------------------
Total 100.0 100.0
=======================================================================================================================
Total Fuel Economy Data:
BTU per net kilowatt-hour generated 10,016 10,089
Cost of fuel per million BTU (cents) 175.81 178.11
Average cost of fuel per net kilowatt-hour generated (cents) 1.76 1.80
=======================================================================================================================
Note: As of 9/1/91, Georgia Power Company's sales to Oglethorpe Power Company are not included in Peak-Hour Demand.
* Less than one-tenth of one percent.
</TABLE>
II-129C
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF INCOME
Georgia Power Company
==============================================================================================================================
For the Years Ended December 31, 1995 1994 1993
- - ------------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
Operating Revenues:
Revenues $ 4,328,432 $ 4,101,504 $ 4,389,513
Revenues from affiliates 76,906 60,899 61,668
- - ------------------------------------------------------------------------------------------------------------------------------
Total operating revenues 4,405,338 4,162,403 4,451,181
- - ------------------------------------------------------------------------------------------------------------------------------
Operating Expenses:
Operation --
Fuel 900,973 870,653 951,507
Purchased power from non-affiliates 183,009 193,130 313,170
Purchased power from affiliates 131,740 158,063 194,024
Provision for separation benefits 10,607 82,238 -
Proceeds from settlement of disputed contracts - - -
Other 735,918 643,375 675,284
Maintenance 292,029 272,818 284,521
Depreciation and amortization 421,850 379,158 379,425
Deferred Plant Vogtle expenses, net 124,454 74,888 36,284
Taxes other than income taxes 204,675 194,566 192,671
Federal and state income taxes 449,204 399,413 452,122
- - ------------------------------------------------------------------------------------------------------------------------------
Total operating expenses 3,454,459 3,268,302 3,479,008
- - ------------------------------------------------------------------------------------------------------------------------------
Operating Income 950,879 894,101 972,173
Other Income (Expense):
Allowance for equity funds used during construction 2,734 5,663 3,168
Equity in earnings of unconsolidated subsidiary 4,051 3,588 4,127
Deferred return on Plant Vogtle - - -
Write-off of Plant Vogtle costs - - -
Income tax reduction for write-off of Plant Vogtle costs - - -
Interest income 5,524 3,254 3,806
Other, net (See note) (8,973) 10,626 11,902
Income taxes applicable to other income 3,022 7,975 37,661
- - ------------------------------------------------------------------------------------------------------------------------------
Income Before Interest Charges 957,237 925,207 1,032,837
- - ------------------------------------------------------------------------------------------------------------------------------
Interest Charges:
Interest on long-term debt 254,607 306,473 343,634
Allowance for debt funds used during construction (12,081) (11,571) (8,271)
Interest on interim obligations 21,463 17,529 15,530
Amortization of debt discount, premium, and expense, net 15,835 15,743 14,024
Other interest charges 20,399 23,483 47,393
- - ------------------------------------------------------------------------------------------------------------------------------
Net interest charges 300,223 351,657 412,310
- - ------------------------------------------------------------------------------------------------------------------------------
Net Income 657,014 573,550 620,527
Dividends on Preferred Stock 48,152 48,006 50,674
- - ------------------------------------------------------------------------------------------------------------------------------
Net Income After Dividends on Preferred Stock $ 608,862 $ 525,544 $ 569,853
==============================================================================================================================
Note: Reflects major sales of facilities to JEA, FP&L, OPC, MEAG, and Dalton.
Increases in net income, after total taxes, from these sales were
$12,312,000 in 1995, $11,275,000 in 1994, $23,191,000 in 1993,
$14,542,000 in 1991, $6,336,000 in 1990, and $3,851,000 in 1987.
</TABLE>
II-130
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF INCOME
Georgia Power Company
==============================================================================================================================
For the Years Ended December 31, 1992 1991 1990
- - ------------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
Operating Revenues:
Revenues $ 4,229,601 $ 4,235,842 $ 4,277,558
Revenues from affiliates 67,835 65,586 168,251
- - ------------------------------------------------------------------------------------------------------------------------------
Total operating revenues 4,297,436 4,301,428 4,445,809
- - ------------------------------------------------------------------------------------------------------------------------------
Operating Expenses:
Operation --
Fuel 929,780 998,701 1,120,933
Purchased power from non-affiliates 436,761 444,920 626,989
Purchased power from affiliates 158,306 193,114 173,716
Provision for separation benefits 9,778 52,952 -
Proceeds from settlement of disputed contracts (4,982) (142,183) -
Other 616,116 596,565 524,665
Maintenance 264,757 295,012 280,304
Depreciation and amortization 375,460 382,549 380,394
Deferred Plant Vogtle expenses, net (30,804) 16,008 31,146
Taxes other than income taxes 179,460 172,893 151,124
Federal and state income taxes 377,542 349,284 270,561
- - ------------------------------------------------------------------------------------------------------------------------------
Total operating expenses 3,312,174 3,359,815 3,559,832
- - ------------------------------------------------------------------------------------------------------------------------------
Operating Income 985,262 941,613 885,977
Other Income (Expense):
Allowance for equity funds used during construction 5,855 9,083 6,985
Equity in earnings of unconsolidated subsidiary 4,635 4,576 4,182
Deferred return on Plant Vogtle - 34,549 82,721
Write-off of Plant Vogtle costs - - (281,254)
Income tax reduction for write-off of Plant Vogtle costs - - 63,231
Interest income 12,475 10,563 7,552
Other, net (See note) (30,527) 13,551 (21,199)
Income taxes applicable to other income 25,163 (7,522) 20,859
- - ------------------------------------------------------------------------------------------------------------------------------
Income Before Interest Charges 1,002,863 1,006,413 769,054
- - ------------------------------------------------------------------------------------------------------------------------------
Interest Charges:
Interest on long-term debt 402,541 459,184 480,174
Allowance for debt funds used during construction (8,310) (10,385) (9,325)
Interest on interim obligations 9,694 4,906 8,512
Amortization of debt discount, premium, and expense, net 8,033 6,214 6,100
Other interest charges 12,425 9,938 9,404
- - ------------------------------------------------------------------------------------------------------------------------------
Net interest charges 424,383 469,857 494,865
- - ------------------------------------------------------------------------------------------------------------------------------
Net Income 578,480 536,556 274,189
Dividends on Preferred Stock 57,942 61,701 66,123
- - ------------------------------------------------------------------------------------------------------------------------------
Net Income After Dividends on Preferred Stock $ 520,538 $ 474,855 $ 208,066
==============================================================================================================================
Note: Reflects major sales of facilities to JEA, FP&L, OPC, MEAG, and Dalton.
Increases in net income, after total taxes, from these sales were
$12,312,000 in 1995, $11,275,000 in 1994, $23,191,000 in 1993,
$14,542,000 in 1991, $6,336,000 in 1990, and $3,851,000 in 1987.
</TABLE>
II-131A
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF INCOME
Georgia Power Company
==============================================================================================================================
For the Years Ended December 31, 1989 1988 1987
- - ------------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
Operating Revenues:
Revenues $ 3,994,846 $ 3,810,728 $ 3,626,487
Revenues from affiliates 150,394 86,751 159,998
- - ------------------------------------------------------------------------------------------------------------------------------
Total operating revenues 4,145,240 3,897,479 3,786,485
- - ------------------------------------------------------------------------------------------------------------------------------
Operating Expenses:
Operation --
Fuel 1,078,586 1,023,173 1,064,552
Purchased power from non-affiliates 543,448 546,511 530,051
Purchased power from affiliates 195,355 164,873 199,831
Provision for separation benefits - - -
Proceeds from settlement of disputed contracts - - -
Other 504,743 541,975 575,182
Maintenance 233,680 246,877 274,672
Depreciation and amortization 346,091 306,492 254,929
Deferred Plant Vogtle expenses, net (39,211) (8,333) (141,977)
Taxes other than income taxes 128,518 146,759 143,289
Federal and state income taxes 273,287 204,222 250,093
- - ------------------------------------------------------------------------------------------------------------------------------
Total operating expenses 3,264,497 3,172,549 3,150,622
- - ------------------------------------------------------------------------------------------------------------------------------
Operating Income 880,743 724,930 635,863
Other Income (Expense):
Allowance for equity funds used during construction 40,525 96,530 159,414
Equity in earnings of unconsolidated subsidiary 3,750 3,302 3,440
Deferred return on Plant Vogtle 48,096 107,310 115,028
Write-off of Plant Vogtle costs - - (357,821)
Income tax reduction for write-off of Plant Vogtle costs - - 128,923
Interest income 10,333 28,445 55,388
Other, net (See note) (20,603) (3,746) (55,081)
Income taxes applicable to other income 15,573 6,583 17,344
- - ------------------------------------------------------------------------------------------------------------------------------
Income Before Interest Charges 978,417 963,354 702,498
- - ------------------------------------------------------------------------------------------------------------------------------
Interest Charges:
Interest on long-term debt 475,991 471,897 480,519
Allowance for debt funds used during construction (34,244) (95,818) (130,756)
Interest on interim obligations 1,059 15,084 16,362
Amortization of debt discount, premium, and expense, net 5,865 5,466 3,573
Other interest charges 8,868 14,556 12,239
- - ------------------------------------------------------------------------------------------------------------------------------
Net interest charges 457,539 411,185 381,937
- - ------------------------------------------------------------------------------------------------------------------------------
Net Income 520,878 552,169 320,561
Dividends on Preferred Stock 71,779 72,637 80,504
- - ------------------------------------------------------------------------------------------------------------------------------
Net Income After Dividends on Preferred Stock $ 449,099 $ 479,532 $ 240,057
==============================================================================================================================
Note: Reflects major sales of facilities to JEA, FP&L, OPC, MEAG, and Dalton.
Increases in net income, after total taxes, from these sales were
$12,312,000 in 1995, $11,275,000 in 1994, $23,191,000 in 1993,
$14,542,000 in 1991, $6,336,000 in 1990, and $3,851,000 in 1987.
</TABLE>
II-131B
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF INCOME
Georgia Power Company
==============================================================================================================
For the Years Ended December 31, 1986 1985
- - --------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C>
Operating Revenues:
Revenues $ 3,469,850 $ 3,459,677
Revenues from affiliates 91,753 149,463
- - --------------------------------------------------------------------------------------------------------------
Total operating revenues 3,561,603 3,609,140
- - --------------------------------------------------------------------------------------------------------------
Operating Expenses:
Operation --
Fuel 1,012,949 1,077,092
Purchased power from non-affiliates 344,708 415,406
Purchased power from affiliates 192,297 204,848
Provision for separation benefits - -
Proceeds from settlement of disputed contracts - -
Other 513,974 482,468
Maintenance 275,533 254,510
Depreciation and amortization 215,763 201,524
Deferred Plant Vogtle expenses, net - -
Taxes other than income taxes 119,768 120,320
Federal and state income taxes 319,374 311,151
- - --------------------------------------------------------------------------------------------------------------
Total operating expenses 2,994,366 3,067,319
- - --------------------------------------------------------------------------------------------------------------
Operating Income 567,237 541,821
Other Income (Expense):
Allowance for equity funds used during construction 275,183 227,950
Equity in earnings of unconsolidated subsidiary 2,967 3,417
Deferred return on Plant Vogtle - -
Write-off of Plant Vogtle costs - -
Income tax reduction for write-off of Plant Vogtle costs - -
Interest income 44,615 41,546
Other, net (See note) (28,464) (6,815)
Income taxes applicable to other income 5,154 (9,114)
- - --------------------------------------------------------------------------------------------------------------
Income Before Interest Charges 866,692 798,805
- - --------------------------------------------------------------------------------------------------------------
Interest Charges:
Interest on long-term debt 472,744 421,764
Allowance for debt funds used during construction (225,897) (216,233)
Interest on interim obligations 1,954 20,516
Amortization of debt discount, premium, and expense, net 2,681 2,335
Other interest charges 4,610 10,593
- - --------------------------------------------------------------------------------------------------------------
Net interest charges 256,092 238,975
- - --------------------------------------------------------------------------------------------------------------
Net Income 610,600 559,830
Dividends on Preferred Stock 75,597 66,113
- - --------------------------------------------------------------------------------------------------------------
Net Income After Dividends on Preferred Stock $ 535,003 $ 493,717
==============================================================================================================
Note: Reflects major sales of facilities to JEA, FP&L, OPC, MEAG, and Dalton.
Increases in net income, after total taxes, from these sales were
$12,312,000 in 1995, $11,275,000 in 1994, $23,191,000 in 1993,
$14,542,000 in 1991, $6,336,000 in 1990, and $3,851,000 in 1987.
</TABLE>
II-131C
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS
Georgia Power Company
===========================================================================================================================
For the Years Ended December 31, 1995 1994 1993
- - ---------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
Operating Activities:
Net income $ 657,014 $ 573,550 $ 620,527
Adjustments to reconcile net income to net
cash provided by operating activities --
Depreciation and amortization 527,310 484,032 475,152
Deferred income taxes, net 37,150 33,567 169,009
Deferred investment tax credits, net - - (18,274)
Allowance for equity funds used during construction (2,734) (5,663) (3,168)
Amortization of deferred Plant Vogtle costs, net 124,454 74,888 36,284
Write-off of Plant Vogtle costs - - -
Non-cash portion of separation benefits - 68,599 -
Non-cash proceeds from settlement of disputed contracts - - -
Other, net 134 (95,314) (46,227)
Changes in certain current assets and liabilities:
Receivables, net (59,370) 67,218 27,088
Inventories 30,761 (63,545) 82,433
Payables 45,882 5,409 17,364
Other 57,422 (5,675) (94,574)
- - ---------------------------------------------------------------------------------------------------------------------------
Net cash provided from operating activities 1,418,023 1,137,066 1,265,614
- - ---------------------------------------------------------------------------------------------------------------------------
Investing Activities:
Gross property additions (480,449) (638,426) (674,432)
Sales of property 131,099 132,644 261,687
Other (42,579) (41,273) (43,154)
- - ---------------------------------------------------------------------------------------------------------------------------
Net cash used for investing activities (391,929) (547,055) (455,899)
- - ---------------------------------------------------------------------------------------------------------------------------
Financing Activities and Capital Contributions:
Proceeds:
Preferred securities - 100,000 -
Preferred stock - - 175,000
First mortgage bonds 75,000 - 1,135,000
Pollution control bonds 504,700 527,210 145,425
Other long-term debt - - 37,000
Capital contributions from parent company - - -
Retirements:
Preferred stock - - (245,005)
First mortgage bonds (505,789) (133,559) (1,337,822)
Pollution control bonds (504,810) (510,320) (145,465)
Other long-term debt (37,000) (10,187) (19,451)
Interim obligations, net (24,472) (57,425) (51,444)
Payment of preferred stock dividends (48,419) (47,147) (53,123)
Payment of common stock dividends (451,500) (429,300) (402,400)
Miscellaneous (17,413) (22,640) (63,648)
- - ---------------------------------------------------------------------------------------------------------------------------
Net cash provided from (used for) financing activities (1,009,703) (583,368) (825,933)
- - ---------------------------------------------------------------------------------------------------------------------------
Net Change in Cash and Cash Equivalents 16,391 6,643 (16,218)
Cash and Cash Equivalents at Beginning of Year 12,539 5,896 22,114
Cash and Cash Equivalents at End of Year $ 28,930 $ 12,539 $ 5,896
===========================================================================================================================
( ) Denotes use of cash.
</TABLE>
II-132
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS
Georgia Power Company
==========================================================================================================================
For the Years Ended December 31, 1992 1991 1990
- - ---------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
Operating Activities:
Net income $ 578,480 $ 536,556 $ 274,189
Adjustments to reconcile net income to net
cash provided by operating activities --
Depreciation and amortization 471,014 480,318 502,098
Deferred income taxes, net 194,955 53,219 88,667
Deferred investment tax credits, net (5,704) (9,524) (52)
Allowance for equity funds used during construction (5,855) (9,083) (6,985)
Amortization of deferred Plant Vogtle costs, net (30,804) (18,541) (51,575)
Write-off of Plant Vogtle costs - - 281,254
Non-cash portion of separation benefits - - -
Non-cash proceeds from settlement of disputed contracts (4,982) (103,846) -
Other, net (9,768) (26,024) (50,804)
Changes in certain current assets and liabilities:
Receivables, net (31,348) 23,920 1,444
Inventories (65,621) 24,130 (23,498)
Payables 25,303 (23,075) (43,470)
Other (85,961) 54,777 (9,991)
- - ---------------------------------------------------------------------------------------------------------------------------
Net cash provided from operating activities 1,029,709 982,827 961,277
- - ---------------------------------------------------------------------------------------------------------------------------
Investing Activities:
Gross property additions (508,444) (548,051) (558,727)
Sales of property 46 291,075 34,573
Other 42,892 931 1,937
- - ---------------------------------------------------------------------------------------------------------------------------
Net cash used for investing activities (465,506) (256,045) (522,217)
- - ---------------------------------------------------------------------------------------------------------------------------
Financing Activities and Capital Contributions:
Proceeds:
Preferred securities - - -
Preferred stock 195,000 100,000 -
First mortgage bonds 975,000 - 300,000
Pollution control bonds 161,955 80,420 -
Other long-term debt - - -
Capital contributions from parent company - - -
Retirements:
Preferred stock (165,004) (100,000) (83,750)
First mortgage bonds (1,381,300) (598,384) (91,117)
Pollution control bonds (160,205) (83,265) (535)
Other long-term debt (567) (1,130) (114,452)
Interim obligations, net 334,671 199,000 -
Payment of preferred stock dividends (60,475) (60,766) (67,757)
Payment of common stock dividends (384,000) (375,200) (389,600)
Miscellaneous (70,986) (17,613) (7,663)
- - ---------------------------------------------------------------------------------------------------------------------------
Net cash provided from (used for) financing activities (555,911) (856,938) (454,874)
- - ---------------------------------------------------------------------------------------------------------------------------
Net Change in Cash and Cash Equivalents 8,292 (130,156) (15,814)
Cash and Cash Equivalents at Beginning of Year 13,822 143,978 159,792
Cash and Cash Equivalents at End of Year $ 22,114 $ 13,822 $ 143,978
===========================================================================================================================
( ) Denotes use of cash.
</TABLE>
II-133A
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS
Georgia Power Company
===========================================================================================================================
For the Years Ended December 31, 1989 1988 1987
- - ---------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
Operating Activities:
Net income $ 520,878 $ 552,169 $ 320,561
Adjustments to reconcile net income to net
cash provided by operating activities --
Depreciation and amortization 484,870 400,665 336,647
Deferred income taxes, net 184,490 160,774 76,445
Deferred investment tax credits, net (8,017) 11,605 (5,075)
Allowance for equity funds used during construction (40,525) (96,530) (159,414)
Amortization of deferred Plant Vogtle costs, net (87,307) (115,643) (257,005)
Write-off of Plant Vogtle costs - - 357,821
Non-cash portion of separation benefits - - -
Non-cash proceeds from settlement of disputed contracts - - -
Other, net (38,046) 6,983 (759)
Changes in certain current assets and liabilities:
Receivables, net (59,035) 11,225 (6,880)
Inventories (33,123) (10,044) (72,540)
Payables (38,976) (2,065) 74,341
Other 36,015 1,161 2,751
- - ---------------------------------------------------------------------------------------------------------------------------
Net cash provided from operating activities 921,224 920,300 666,893
- - ---------------------------------------------------------------------------------------------------------------------------
Investing Activities:
Gross property additions (727,631) (929,019) (1,034,059)
Sales of property - - 12,276
Other 47,260 35,328 45,801
- - ---------------------------------------------------------------------------------------------------------------------------
Net cash used for investing activities (680,371) (893,691) (975,982)
- - ---------------------------------------------------------------------------------------------------------------------------
Financing Activities and Capital Contributions:
Proceeds:
Preferred securities - - -
Preferred stock - - 125,000
First mortgage bonds 250,000 150,000 500,000
Pollution control bonds 50,000 69,526 191,736
Other long-term debt - - -
Capital contributions from parent company - 175,000 228,000
Retirements:
Preferred stock (7,500) (3,750) (150,000)
First mortgage bonds (91,516) (206,677) (217,949)
Pollution control bonds (505) (475) (90,000)
Other long-term debt (3,806) (2,878) (2,824)
Interim obligations, net - (302,261) 302,261
Payment of preferred stock dividends (72,259) (72,931) (80,420)
Payment of common stock dividends (394,500) (386,600) (377,800)
Miscellaneous (4,742) (13,440) (51,745)
- - ---------------------------------------------------------------------------------------------------------------------------
Net cash provided from (used for) financing activities (274,828) (594,486) 376,259
- - ---------------------------------------------------------------------------------------------------------------------------
Net Change in Cash and Cash Equivalents (33,975) (567,877) 67,170
Cash and Cash Equivalents at Beginning of Year 193,767 761,644 694,474
Cash and Cash Equivalents at End of Year $ 159,792 $ 193,767 $ 761,644
===========================================================================================================================
( ) Denotes use of cash.
</TABLE>
II-133B
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS
Georgia Power Company
=========================================================================================================
For the Years Ended December 31, 1986 1985
- - ---------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C>
Operating Activities:
Net income $ 610,600 $ 559,830
Adjustments to reconcile net income to net
cash provided by operating activities --
Depreciation and amortization 260,945 248,256
Deferred income taxes, net 236,822 104,102
Deferred investment tax credits, net 106,407 115,144
Allowance for equity funds used during construction (275,183) (227,950)
Amortization of deferred Plant Vogtle costs, net - -
Write-off of Plant Vogtle costs - -
Non-cash portion of separation benefits - -
Non-cash proceeds from settlement of disputed contracts - -
Other, net 5,554 34,311
Changes in certain current assets and liabilities:
Receivables, net (7,474) (27,928)
Inventories (26,863) 77,667
Payables 133,044 (9,182)
Other 19,682 21,289
- - ---------------------------------------------------------------------------------------------------------
Net cash provided from operating activities 1,063,534 895,539
- - ---------------------------------------------------------------------------------------------------------
Investing Activities:
Gross property additions (1,598,309) (1,384,182)
Sales of property - -
Other 168,518 92,826
- - ---------------------------------------------------------------------------------------------------------
Net cash used for investing activities (1,429,791) (1,291,356)
- - ---------------------------------------------------------------------------------------------------------
Financing Activities and Capital Contributions:
Proceeds:
Preferred securities - -
Preferred stock 100,000 150,000
First mortgage bonds 500,000 -
Pollution control bonds 350,001 500,962
Other long-term debt 113,000 -
Capital contributions from parent company 250,000 315,000
Retirements:
Preferred stock (7,500) (3,750)
First mortgage bonds (377,538) (17,738)
Pollution control bonds - -
Other long-term debt (108) (843)
Interim obligations, net (36,715) (72,956)
Payment of preferred stock dividends (73,665) (62,337)
Payment of common stock dividends (325,500) (277,500)
Miscellaneous (33,773) (17,503)
- - ---------------------------------------------------------------------------------------------------------
Net cash provided from (used for) financing activities 458,202 513,335
- - ---------------------------------------------------------------------------------------------------------
Net Change in Cash and Cash Equivalents 91,945 117,518
Cash and Cash Equivalents at Beginning of Year 602,529 485,011
Cash and Cash Equivalents at End of Year $ 694,474 $ 602,529
=========================================================================================================
( ) Denotes use of cash.
</TABLE>
II-133C
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
Georgia Power Company
============================================================================================================================
At December 31, 1995 1994 1993
- - ----------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
ASSETS
Electric Plant:
Production-
Fossil $ 3,105,165 $ 3,077,470 $ 2,976,806
Nuclear 4,082,098 4,075,339 4,069,299
Hydro 642,237 443,466 442,888
- - ----------------------------------------------------------------------------------------------------------------------------
Total production 7,829,500 7,596,275 7,488,993
Transmission 1,822,778 1,754,945 1,713,122
Distribution 3,949,238 3,777,279 3,600,115
General 937,079 926,418 941,291
Construction work in progress 236,715 541,889 584,013
Nuclear fuel, at amortized cost 124,849 136,425 135,742
- - ----------------------------------------------------------------------------------------------------------------------------
Total electric plant 14,900,159 14,733,231 14,463,276
- - ----------------------------------------------------------------------------------------------------------------------------
Steam Heat Plant - - -
- - ----------------------------------------------------------------------------------------------------------------------------
Total utility plant 14,900,159 14,733,231 14,463,276
- - ----------------------------------------------------------------------------------------------------------------------------
Accumulated Provision for Depreciation:
Electric 4,417,120 4,054,986 3,822,344
Steam heat - - -
- - ----------------------------------------------------------------------------------------------------------------------------
Total accumulated provision for depreciation 4,417,120 4,054,986 3,822,344
- - ----------------------------------------------------------------------------------------------------------------------------
Total 10,483,039 10,678,245 10,640,932
- - ----------------------------------------------------------------------------------------------------------------------------
Less property-related accumulated deferred income taxes - - -
- - ----------------------------------------------------------------------------------------------------------------------------
Total 10,483,039 10,678,245 10,640,932
- - ----------------------------------------------------------------------------------------------------------------------------
Other Property and Investments:
Securities received from settlement of disputed contracts - - -
Nuclear decommissioning trusts 92,273 54,297 37,937
Miscellaneous 147,615 116,527 61,142
- - ----------------------------------------------------------------------------------------------------------------------------
Total 239,888 170,824 99,079
- - ----------------------------------------------------------------------------------------------------------------------------
Current Assets:
Cash and cash equivalents 28,930 12,539 5,896
Investment securities - - -
Receivables, net 411,038 389,279 515,178
Accrued utility revenues 121,146 103,223 99,550
Fossil fuel stock, at average cost 145,151 169,252 111,620
Materials and supplies, at average cost 286,804 293,464 287,551
Prepayments 107,764 55,383 65,269
Vacation pay deferred 35,543 40,823 41,575
- - ----------------------------------------------------------------------------------------------------------------------------
Total 1,136,376 1,063,963 1,126,639
- - ----------------------------------------------------------------------------------------------------------------------------
Deferred Charges:
Deferred charges related to income taxes 871,783 919,750 992,510
Deferred Plant Vogtle costs 307,638 432,092 506,980
Debt expense, being amortized 27,227 26,223 20,730
Premium on reacquired debt, being amortized 174,018 164,676 153,146
Miscellaneous 230,306 256,885 196,094
- - ----------------------------------------------------------------------------------------------------------------------------
Total 1,610,972 1,799,626 1,869,460
- - ----------------------------------------------------------------------------------------------------------------------------
Total Assets $ 13,470,275 $ 13,712,658 $ 13,736,110
============================================================================================================================
</TABLE>
II-134
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
Georgia Power Company
==========================================================================================================================
At December 31, 1992 1991 1990
- - --------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
ASSETS
Electric Plant:
Production-
Fossil $ 3,144,405 $ 3,128,594 $ 3,350,018
Nuclear 4,051,020 4,051,043 4,025,862
Hydro 434,341 432,674 412,157
- - --------------------------------------------------------------------------------------------------------------------------
Total production 7,629,766 7,612,311 7,788,037
Transmission 1,646,904 1,566,173 1,522,157
Distribution 3,413,681 3,252,111 3,056,825
General 923,010 896,477 876,989
Construction work in progress 405,606 390,437 370,243
Nuclear fuel, at amortized cost 155,194 191,726 210,320
- - --------------------------------------------------------------------------------------------------------------------------
Total electric plant 14,174,161 13,909,235 13,824,571
- - --------------------------------------------------------------------------------------------------------------------------
Steam Heat Plant - - -
- - --------------------------------------------------------------------------------------------------------------------------
Total utility plant 14,174,161 13,909,235 13,824,571
- - --------------------------------------------------------------------------------------------------------------------------
Accumulated Provision for Depreciation:
Electric 3,569,717 3,315,247 3,040,298
Steam heat - - -
- - --------------------------------------------------------------------------------------------------------------------------
Total accumulated provision for depreciation 3,569,717 3,315,247 3,040,298
- - --------------------------------------------------------------------------------------------------------------------------
Total 10,604,444 10,593,988 10,784,273
- - --------------------------------------------------------------------------------------------------------------------------
Less property-related accumulated deferred income taxes 1,589,743 1,465,408 1,397,647
- - --------------------------------------------------------------------------------------------------------------------------
Total 9,014,701 9,128,580 9,386,626
- - --------------------------------------------------------------------------------------------------------------------------
Other Property and Investments:
Securities received from settlement of disputed contracts - 107,993 -
Nuclear decommissioning trusts 20,311 10,007 -
Miscellaneous 55,463 71,880 78,895
- - --------------------------------------------------------------------------------------------------------------------------
Total 75,774 189,880 78,895
- - --------------------------------------------------------------------------------------------------------------------------
Current Assets:
Cash and cash equivalents 22,114 13,822 143,978
Investment securities 108,206 - -
Receivables, net 385,227 330,411 356,236
Accrued utility revenues 88,164 79,099 78,067
Fossil fuel stock, at average cost 197,332 200,248 225,966
Materials and supplies, at average cost 284,272 215,735 220,103
Prepayments 91,447 96,750 121,646
Vacation pay deferred 40,169 39,769 33,677
- - --------------------------------------------------------------------------------------------------------------------------
Total 1,216,931 975,834 1,179,673
- - --------------------------------------------------------------------------------------------------------------------------
Deferred Charges:
Deferred charges related to income taxes - - -
Deferred Plant Vogtle costs 383,025 375,028 364,446
Debt expense, being amortized 17,719 12,368 12,708
Premium on reacquired debt, being amortized 116,940 70,855 60,653
Miscellaneous 139,352 89,993 93,618
- - --------------------------------------------------------------------------------------------------------------------------
Total 657,036 548,244 531,425
- - --------------------------------------------------------------------------------------------------------------------------
Total Assets $ 10,964,442 $ 10,842,538 $ 11,176,619
==========================================================================================================================
</TABLE>
II-135A
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
Georgia Power Company
=========================================================================================================================
At December 31, 1989 1988 1987
- - -------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
ASSETS
Electric Plant:
Production-
Fossil $ 3,319,876 $ 2,638,725 $ 2,616,741
Nuclear 4,189,723 3,225,945 3,220,632
Hydro 411,235 407,771 404,291
- - -------------------------------------------------------------------------------------------------------------------------
Total production 7,920,834 6,272,441 6,241,664
Transmission 1,431,485 1,322,034 1,248,976
Distribution 2,863,011 2,598,714 2,318,185
General 859,013 737,621 657,258
Construction work in progress 403,365 1,963,283 1,710,769
Nuclear fuel, at amortized cost 254,101 307,109 287,492
- - -------------------------------------------------------------------------------------------------------------------------
Total electric plant 13,731,809 13,201,202 12,464,344
- - -------------------------------------------------------------------------------------------------------------------------
Steam Heat Plant - - 7
- - -------------------------------------------------------------------------------------------------------------------------
Total utility plant 13,731,809 13,201,202 12,464,351
- - -------------------------------------------------------------------------------------------------------------------------
Accumulated Provision for Depreciation:
Electric 2,762,937 2,445,404 2,193,395
Steam heat - - (5)
- - -------------------------------------------------------------------------------------------------------------------------
Total accumulated provision for depreciation 2,762,937 2,445,404 2,193,390
- - -------------------------------------------------------------------------------------------------------------------------
Total 10,968,872 10,755,798 10,270,961
- - -------------------------------------------------------------------------------------------------------------------------
Less property-related accumulated deferred income taxes 1,313,626 1,178,291 1,077,747
- - -------------------------------------------------------------------------------------------------------------------------
Total 9,655,246 9,577,507 9,193,214
- - -------------------------------------------------------------------------------------------------------------------------
Other Property and Investments:
Securities received from settlement of disputed contracts - - -
Nuclear decommissioning trusts - - -
Miscellaneous 69,839 66,677 54,148
- - -------------------------------------------------------------------------------------------------------------------------
Total 69,839 66,677 54,148
- - -------------------------------------------------------------------------------------------------------------------------
Current Assets:
Cash and cash equivalents 159,792 193,767 761,644
Investment securities - - -
Receivables, net 347,899 320,018 342,315
Accrued utility revenues 93,786 66,265 68,370
Fossil fuel stock, at average cost 214,487 225,274 262,752
Materials and supplies, at average cost 208,084 164,174 116,652
Prepayments 116,342 121,840 113,381
Vacation pay deferred 35,238 34,418 30,100
- - -------------------------------------------------------------------------------------------------------------------------
Total 1,175,628 1,125,756 1,695,214
- - -------------------------------------------------------------------------------------------------------------------------
Deferred Charges:
Deferred charges related to income taxes - - -
Deferred Plant Vogtle costs 322,116 269,958 172,990
Debt expense, being amortized 13,032 12,476 12,985
Premium on reacquired debt, being amortized 61,889 62,352 51,509
Miscellaneous 74,596 15,813 17,434
- - -------------------------------------------------------------------------------------------------------------------------
Total 471,633 360,599 254,918
- - -------------------------------------------------------------------------------------------------------------------------
Total Assets $ 11,372,346 $ 11,130,539 $ 11,197,494
=========================================================================================================================
</TABLE>
II-135B
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
Georgia Power Company
================================================================================================================
At December 31, 1986 1985
- - ----------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C>
ASSETS
Electric Plant:
Production-
Fossil $ 2,138,511 $ 2,118,863
Nuclear 739,835 652,756
Hydro 399,120 388,832
- - ----------------------------------------------------------------------------------------------------------------
Total production 3,277,466 3,160,451
Transmission 1,176,479 1,004,329
Distribution 2,096,498 1,892,127
General 578,236 501,477
Construction work in progress 4,430,152 3,581,065
Nuclear fuel, at amortized cost 314,225 253,418
- - ----------------------------------------------------------------------------------------------------------------
Total electric plant 11,873,056 10,392,867
- - ----------------------------------------------------------------------------------------------------------------
Steam Heat Plant 15,266 14,709
- - ----------------------------------------------------------------------------------------------------------------
Total utility plant 11,888,322 10,407,576
- - ----------------------------------------------------------------------------------------------------------------
Accumulated Provision for Depreciation:
Electric 2,001,605 1,851,649
Steam heat 7,841 7,517
- - ----------------------------------------------------------------------------------------------------------------
Total accumulated provision for depreciation 2,009,446 1,859,166
- - ----------------------------------------------------------------------------------------------------------------
Total 9,878,876 8,548,410
- - ----------------------------------------------------------------------------------------------------------------
Less property-related accumulated deferred income taxes 1,020,271 920,047
- - ----------------------------------------------------------------------------------------------------------------
Total 8,858,605 7,628,363
- - ----------------------------------------------------------------------------------------------------------------
Other Property and Investments:
Securities received from settlement of disputed contracts - -
Nuclear decommissioning trusts - -
Miscellaneous 50,749 39,357
- - ----------------------------------------------------------------------------------------------------------------
Total 50,749 39,357
- - ----------------------------------------------------------------------------------------------------------------
Current Assets:
Cash and cash equivalents 694,474 602,529
Investment securities - -
Receivables, net 374,590 367,226
Accrued utility revenues 55,513 55,403
Fossil fuel stock, at average cost 220,206 210,604
Materials and supplies, at average cost 86,658 69,397
Prepayments 44,800 8,506
Vacation pay deferred 29,800 28,700
- - ----------------------------------------------------------------------------------------------------------------
Total 1,506,041 1,342,365
- - ----------------------------------------------------------------------------------------------------------------
Deferred Charges:
Deferred charges related to income taxes - -
Deferred Plant Vogtle costs - -
Debt expense, being amortized 12,860 12,450
Premium on reacquired debt, being amortized 26,914 -
Miscellaneous 9,894 8,083
- - ----------------------------------------------------------------------------------------------------------------
Total 49,668 20,533
- - ----------------------------------------------------------------------------------------------------------------
Total Assets $ 10,465,063 $ 9,030,618
================================================================================================================
</TABLE>
II-135C
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
Georgia Power Company
==================================================================================================================================
At December 31, 1995 1994 1993
- - ----------------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock $ 344,250 $ 344,250 $ 344,250
Paid-in capital 2,384,444 2,384,348 2,384,348
Premium on preferred stock 413 413 413
Earnings retained in the business 1,569,905 1,412,543 1,316,447
- - ----------------------------------------------------------------------------------------------------------------------------------
Total common equity 4,299,012 4,141,554 4,045,458
Preferred stock 692,787 692,787 692,787
Preferred stock subject to mandatory redemption - - -
Subsidiary obligated mandatorily redeemable preferred securities 100,000 100,000 -
Long-term debt 3,315,460 3,757,823 4,031,387
- - ----------------------------------------------------------------------------------------------------------------------------------
Total (excluding amount due within one year) 8,407,259 8,692,164 8,769,632
- - ----------------------------------------------------------------------------------------------------------------------------------
Current Liabilities:
Notes payable to banks 178,000 202,200 406,700
Commercial paper 222,330 222,602 75,527
Preferred stock due within one year - - -
Long-term debt due within one year 150,446 167,420 10,543
Accounts payable 389,156 355,067 324,044
Customer deposits 53,145 47,017 45,922
Taxes accrued 104,392 93,019 153,493
Interest accrued 96,162 110,256 110,497
Vacation pay accrued 34,233 39,720 40,060
Miscellaneous 137,184 70,006 64,527
- - ----------------------------------------------------------------------------------------------------------------------------------
Total 1,365,048 1,307,307 1,231,313
- - ----------------------------------------------------------------------------------------------------------------------------------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 2,510,458 2,477,661 2,479,720
Accumulated deferred investment tax credits 432,184 453,121 478,334
Disallowed Plant Vogtle capacity buyback costs 58,514 60,490 63,067
Deferred credits related to income taxes 410,016 433,334 452,819
Miscellaneous 286,796 288,581 261,225
- - ----------------------------------------------------------------------------------------------------------------------------------
Total 3,697,968 3,713,187 3,735,165
- - ----------------------------------------------------------------------------------------------------------------------------------
Total Capitalization and Liabilities $ 13,470,275 $ 13,712,658 $ 13,736,110
==================================================================================================================================
</TABLE>
II-136
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
Georgia Power Company
================================================================================================================================
At December 31, 1992 1991 1990
- - --------------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock $ 344,250 $ 344,250 $ 344,250
Paid-in capital 2,384,140 2,383,800 2,383,800
Premium on preferred stock 467 489 1,089
Earnings retained in the business 1,159,380 1,038,012 944,774
- - --------------------------------------------------------------------------------------------------------------------------------
Total common equity 3,888,237 3,766,551 3,673,913
Preferred stock 692,792 607,796 607,796
Preferred stock subject to mandatory redemption 6,250 118,750 125,000
Subsidiary obligated mandatorily redeemable preferred securities - - -
Long-term debt 4,131,016 4,553,189 5,000,225
- - --------------------------------------------------------------------------------------------------------------------------------
Total (excluding amount due within one year) 8,718,295 9,046,286 9,406,934
- - --------------------------------------------------------------------------------------------------------------------------------
Current Liabilities:
Notes payable to banks 400,200 199,000 -
Commercial paper 133,471 - -
Preferred stock due within one year 63,750 6,250 -
Long-term debt due within one year 95,823 54,976 204,906
Accounts payable 317,351 275,932 310,676
Customer deposits 45,145 41,623 38,144
Taxes accrued 138,289 161,117 84,185
Interest accrued 132,319 151,171 175,959
Vacation pay accrued 38,694 38,531 33,677
Miscellaneous 89,355 106,810 135,392
- - --------------------------------------------------------------------------------------------------------------------------------
Total 1,454,397 1,035,410 982,939
- - --------------------------------------------------------------------------------------------------------------------------------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes - - -
Accumulated deferred investment tax credits 515,539 540,134 576,837
Disallowed Plant Vogtle capacity buyback costs 72,201 109,537 135,926
Deferred credits related to income taxes - - -
Miscellaneous 204,010 111,171 73,983
- - --------------------------------------------------------------------------------------------------------------------------------
Total 791,750 760,842 786,746
- - --------------------------------------------------------------------------------------------------------------------------------
Total Capitalization and Liabilities $ 10,964,442 $ 10,842,538 $ 11,176,619
================================================================================================================================
</TABLE>
II-137A
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
Georgia Power Company
==============================================================================================================================
At December 31, 1989 1988 1987
- - ------------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock $ 344,250 $ 344,250 $ 344,250
Paid-in capital 2,383,800 2,383,800 2,208,800
Premium on preferred stock 1,089 1,089 1,089
Earnings retained in the business 1,131,518 1,076,931 984,043
- - ------------------------------------------------------------------------------------------------------------------------------
Total common equity 3,860,657 3,806,070 3,538,182
Preferred stock 607,844 657,844 657,844
Preferred stock subject to mandatory redemption 155,000 162,500 166,250
Subsidiary obligated mandatorily redeemable preferred securities - - -
Long-term debt 5,054,001 4,861,378 4,825,760
- - ------------------------------------------------------------------------------------------------------------------------------
Total (excluding amount due within one year) 9,677,502 9,487,792 9,188,036
- - ------------------------------------------------------------------------------------------------------------------------------
Current Liabilities:
Notes payable to banks - - 302,261
Commercial paper - - -
Preferred stock due within one year 53,750 3,750 3,750
Long-term debt due within one year 54,712 42,001 65,774
Accounts payable 372,968 429,807 446,004
Customer deposits 36,255 34,221 31,106
Taxes accrued 91,424 130,686 114,947
Interest accrued 162,513 170,090 162,439
Vacation pay accrued 35,238 34,418 30,100
Miscellaneous 130,546 51,289 62,364
- - ------------------------------------------------------------------------------------------------------------------------------
Total 937,406 896,262 1,218,745
- - ------------------------------------------------------------------------------------------------------------------------------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes - - -
Accumulated deferred investment tax credits 601,248 632,111 640,694
Disallowed Plant Vogtle capacity buyback costs 73,111 80,585 79,376
Deferred credits related to income taxes - - -
Miscellaneous 83,079 33,789 70,643
- - ------------------------------------------------------------------------------------------------------------------------------
Total 757,438 746,485 790,713
- - ------------------------------------------------------------------------------------------------------------------------------
Total Capitalization and Liabilities $ 11,372,346 $ 11,130,539 $ 11,197,494
==============================================================================================================================
</TABLE>
II-137B
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
Georgia Power Company
================================================================================================================
At December 31, 1986 1985
- - ----------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C>
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock $ 344,250 $ 344,250
Paid-in capital 1,980,800 1,730,800
Premium on preferred stock 3,074 3,074
Earnings retained in the business 1,141,077 935,583
- - ----------------------------------------------------------------------------------------------------------------
Total common equity 3,469,201 3,013,707
Preferred stock 732,844 632,844
Preferred stock subject to mandatory redemption 112,500 120,000
Subsidiary obligated mandatorily redeemable preferred securities - -
Long-term debt 4,464,857 3,878,066
- - ----------------------------------------------------------------------------------------------------------------
Total (excluding amount due within one year) 8,779,402 7,644,617
- - ----------------------------------------------------------------------------------------------------------------
Current Liabilities:
Notes payable to banks - 36,400
Commercial paper - -
Preferred stock due within one year 7,500 7,500
Long-term debt due within one year 47,683 48,229
Accounts payable 488,910 355,866
Customer deposits 29,520 29,752
Taxes accrued 140,968 92,028
Interest accrued 150,145 136,279
Vacation pay accrued 29,800 28,700
Miscellaneous 70,595 60,965
- - ----------------------------------------------------------------------------------------------------------------
Total 965,121 795,719
- - ----------------------------------------------------------------------------------------------------------------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes - -
Accumulated deferred investment tax credits 665,447 572,509
Disallowed Plant Vogtle capacity buyback costs - -
Deferred credits related to income taxes - -
Miscellaneous 55,093 17,773
- - ----------------------------------------------------------------------------------------------------------------
Total 720,540 590,282
- - ----------------------------------------------------------------------------------------------------------------
Total Capitalization and Liabilities $ 10,465,063 $ 9,030,618
================================================================================================================
</TABLE>
II-137C
<PAGE>
GEORGIA POWER COMPANY
OUTSTANDING SECURITIES AT DECEMBER 31, 1995
First Mortgage Bonds
Amount Interest Amount
Series Issued Rate Outstanding Maturity
- - --------------------------------------------------------------------------------
(Thousands) (Thousands)
1993 $ 150,000 4-3/4% $ 150,000 3/1/96
1993 100,000 5-1/2% 100,000 4/1/98
1992 195,000 6-1/8% 195,000 9/1/99
1993 100,000 6% 100,000 3/1/00
1992 100,000 7% 100,000 10/1/00
1992 150,000 6-7/8% 150,000 9/1/02
1993 200,000 6-5/8% 200,000 4/1/03
1993 75,000 6.35% 75,000 8/1/03
1993 50,000 6-7/8% 50,000 4/1/08
1992 100,000 8-5/8% 60,368 6/1/22
1993 160,000 7.95% 160,000 2/1/23
1993 100,000 7-5/8% 100,000 3/1/23
1993 75,000 7-3/4% 75,000 4/1/23
1993 125,000 7.55% 125,000 8/1/23
1995 75,000 7.70% 75,000 5/1/25
============= ==============
$ 1,755,000 $ 1,715,368
============= ==============
Pollution Control Bonds
Amount Interest Amount
Series Issued Rate Outstanding Maturity
- - --------------------------------------------------------------------------------
(Thousands) (Thousands)
1995 $ 50,000 4-3/8% $ 50,000 11/1/00
1992 38,800 5.70% 38,800 9/1/04
1993 46,790 5-3/8% 46,790 3/1/05
1995 57,000 5% 57,000 9/1/05
1976 40,800 6-3/4% 1,920 11/1/06
1977 24,100 6.40% 1,940 6/1/07
1978 21,600 6-3/8% 8,060 4/1/08
1991 10,450 Variable 10,450 7/1/11
1986 56,400 8% 56,400 10/1/16
1987 90,000 8-3/8% 90,000 7/1/17
1987 50,000 9-3/8% 50,000 12/1/17
1993 26,700 6% 26,700 3/1/18
1989 50,000 6.35% 50,000 5/1/19
1991 8,500 6.25% 8,500 7/1/19
1991 51,345 7.25% 51,345 7/1/21
1991 10,125 6.25% 10,125 7/1/21
1992 13,155 Variable 13,155 5/1/22
1992 75,000 6.20% 75,000 8/1/22
1992 35,000 6.20% 35,000 9/1/22
1993 11,935 5-3/4% 11,935 9/1/23
1993 60,000 5-3/4% 60,000 9/1/23
1994 28,065 5.40% 28,065 1/1/24
1994 175,000 Variable 175,000 7/1/24
1994 125,000 6.60% 125,000 7/1/24
1994 60,000 6-3/8% 60,000 8/1/24
1994 43,420 6-3/4% 43,420 10/1/24
1994 20,000 Variable 20,000 10/1/24
1994 20,000 Variable 20,000 10/1/24
1994 38,725 6-5/8% 38,725 10/1/24
1994 10,000 5.90% 10,000 12/1/24
1994 7,000 5.90% 7,000 12/1/24
1995 73,535 6.10% 73,535 4/1/25
1995 75,000 Variable 75,000 4/1/25
1995 45,000 Variable 45,000 7/1/25
1995 40,000 Variable 40,000 7/1/25
1995 71,580 6% 71,580 7/1/25
1995 35,585 Variable 35,585 9/1/25
1995 30,000 Variable 30,000 9/1/25
1995 27,000 Variable 27,000 9/1/25
============= ==============
$ 1,752,610 $ 1,678,030
============= ==============
II-138
<PAGE>
GEORGIA POWER COMPANY
OUTSTANDING SECURITIES AT DECEMBER 31, 1995 (Continued)
Subsidiary Obligated Mandatorily Redeemable Preferred Securities(1)
Preferred Securities Interest Amount
Series Outstanding Rate Outstanding
- - --------------------------------------------------------------------------------
(Thousands)
1994 4,000,000 9% $ 100,000
Preferred Stock
Shares Dividend Amount
Series Outstanding Rate Outstanding
- - --------------------------------------------------------------------------------
(Thousands)
(2) 14,090 $5.00 $ 1,409
1953 100,000 $4.92 10,000
1954 433,774 $4.60 43,378
1961 70,000 $4.96 7,000
1962 70,000 $4.60 7,000
1963 70,000 $4.60 7,000
1964 50,000 $4.60 5,000
1965 60,000 $4.72 6,000
1966 90,000 $5.64 9,000
1967 120,000 $6.48 12,000
1968 100,000 $6.60 10,000
1971 300,000 $7.72 30,000
1972 750,000 $7.80 75,000
1991 4,000,000 $2.125 100,000
1992 2,000,000 $1.90 50,000
1992 2,200,000 $1.9875 55,000
1992 2,400,000 $1.9375 60,000
1992 1,200,000 $1.925 30,000
1993 3,000,000 Adjustable 75,000
1993 4,000,000 Adjustable 100,000
------------- ------------
21,027,864 $ 692,787
============= ============
(1) Issued by Georgia Power Capital, L.P., and guaranteed to the extent Georgia
Power Capital has funds by GEORGIA.
(2) Issued in exchange for $5.00 preferred outstanding at the time of
company formation.
II-139
<PAGE>
GEORGIA POWER COMPANY
SECURITIES RETIRED DURING 1995
First Mortgage Bonds
Principal Interest
Series Amount Rate
- - ------------------------------------------------------------------------------
(Thousands)
1989 $ 36,157 9.23%
1992 130,000 5-1/8%
1992 100,000 8-3/4%
1992 39,632 8-5/8%
1992 100,000 Variable
1992 100,000 Variable
===========
$ 505,789
===========
Pollution Control Bonds
Principal Interest
Series Amount Rate
- - ------------------------------------------------------------------------------
(Thousands)
1976 $ 20 6-3/4%
1977 20 6.40%
1978 70 6-3/8%
1985 148,535 10-1/8%
1985 156,580 10-1/2%
1985 100,000 10.60%
1985 99,585 10-1/2%
-----------
$ 504,810
===========
II-140
<PAGE>
GULF POWER COMPANY
FINANCIAL SECTION
II-141
<PAGE>
MANAGEMENT'S REPORT
Gulf Power Company 1995 Annual Report
The management of Gulf Power Company has prepared -- and is responsible for --
the financial statements and related information included in this report. These
statements were prepared in accordance with generally accepted accounting
principles appropriate in the circumstances and necessarily include amounts that
are based on the best estimates and judgments of management. Financial
information throughout this annual report is consistent with the financial
statements.
The Company maintains a system of internal accounting controls to provide
reasonable assurance that assets are safeguarded and that books and records
reflect only authorized transactions of the Company. Limitations exist in any
system of internal controls, however, based on a recognition that the cost of
the system should not exceed its benefits. The Company believes its system of
internal accounting controls maintains an appropriate cost/benefit relationship.
The Company's system of internal accounting controls is evaluated on an
ongoing basis by the Company's internal audit staff. The Company's independent
public accountants also consider certain elements of the internal control system
in order to determine their auditing procedures for the purpose of expressing an
opinion on the financial statements.
The audit committee of the board of directors, composed of five directors who
are not employees, provides a broad overview of management's financial reporting
and control functions. Periodically, this committee meets with management, the
internal auditors, and the independent public accountants to ensure that these
groups are fulfilling their obligations and to discuss auditing, internal
controls, and financial reporting matters. The internal auditors and independent
public accountants have access to the members of the audit committee at any
time.
Management believes that its policies and procedures provide reasonable
assurance that the Company's operations are conducted according to a high
standard of business ethics.
In management's opinion, the consolidated financial statements present
fairly, in all material respects, the financial position, results of operations,
and cash flows of Gulf Power Company in conformity with generally accepted
accounting principles.
/s/ Travis J. Bowden
Travis J. Bowden
President and Chief Executive Officer
/s/ Arlan E. Scarbrough
Arlan E. Scarbrough
Chief Financial Officer
February 21, 1996
II-142
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of Gulf Power Company:
We have audited the accompanying balance sheets and statements of capitalization
of Gulf Power Company (a Maine corporation and a wholly owned subsidiary of The
Southern Company) as of December 31, 1995 and 1994, and the related statements
of income, retained earnings, paid-in capital, and cash flows for each of the
three years in the period ended December 31, 1995. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements (pages II-152 through II-169)
referred to above present fairly, in all material respects, the financial
position of Gulf Power Company as of December 31, 1995 and 1994, and the
results of its operations and its cash flows for the periods stated, in
conformity with generally accepted accounting principles.
/s/ Arthur Andersen LLP
Atlanta, Georgia
February 21, 1996
II-143
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION
Gulf Power Company 1995 Annual Report
RESULTS OF OPERATIONS
Earnings
Gulf Power Company's 1995 net income after dividends on preferred stock was
$57.2 million, an increase of $2 million over the prior year. This improvement
is primarily attributable to higher retail revenues due to exceptionally hot
summer weather and lower interest charges on long-term debt. This improvement
was partially offset by higher maintenance expenses and reduced capacity
revenues from non-affiliated utilities under long-term contracts. Costs related
to a work force reduction program implemented in the fourth quarter of 1995
decreased earnings by $4.3 million. These costs are expected to be recovered
through future savings over approximately two years.
In 1994, earnings were $55.2 million, representing an increase of $0.9
million compared to the prior year. Earnings in 1994 were significantly affected
by lower financing costs, an increase in customers, and milder than normal
temperatures. Also, earnings decreased approximately $3.0 million, reflecting
the first full year of lower industrial sales due to the Company's largest
industrial customer, Monsanto, installing its own cogeneration facility in
August, 1993.
The return on average common equity for 1995 was 13.27 percent, a slight
increase from the 13.15 percent return earned in 1994.
Revenues
Operating revenues increased in 1995 and decreased in 1994 as a result of the
following factors:
Increase (Decrease)
From Prior Year
-------------------------------------
1995 1994 1993
-------------------------------------
(in thousands)
Retail --
Change in base rates $ - $ - $ 1,571
Sales growth 3,647 7,126 7,671
Weather 9,749 (4,631) 4,049
Regulatory cost
recovery and other 22,502 8,938 (3,079)
- - -----------------------------------------------------------------
Total retail 35,898 11,433 10,212
- - -----------------------------------------------------------------
Sales for resale--
Non-affiliates (5,698) (6,098) 2,131
Affiliates 1,266 (5,813) (909)
- - -----------------------------------------------------------------
Total sales for resale (4,432) (11,911) 1,222
Other operating
revenues 8,798 (3,851) 806
- - -----------------------------------------------------------------
Total operating
revenues $40,264 $(4,329) $12,240
=================================================================
Percent change 7.0% (0.7)% 2.1%
- - -----------------------------------------------------------------
Retail revenues of $519 million in 1995 increased $35.9 million or 7.4
percent from last year, compared with an increase of 2.4 percent in 1994 and 2.2
percent in 1993. Residential and commercial revenues surged upward as a result
of hotter-than-normal summer weather in 1995, compared with the extremely mild
summer of 1994. The Company set an all-time peak demand for energy in 1995.
The increase in regulatory cost recovery and other retail revenue is
primarily attributable to the recovery of increased fuel costs. Regulatory cost
recovery and other includes recovery provisions for fuel expense and the energy
component of purchased power costs; energy conservation costs; purchased power
capacity costs; and environmental compliance costs. The recovery provisions
equal the related expenses and have no material effect on net income. See Notes
1 and 3 to the financial statements under "Revenues and Regulatory Cost Recovery
Clauses" and "Environmental Cost Recovery," respectively, for further
information.
II-144
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Gulf Power Company 1995 Annual Report
Sales for resale were $79 million in 1995, decreasing $4.4 million or 5.3
percent from 1994. Revenues from sales to utilities outside the service area
under long-term contracts consist of capacity and energy components. Capacity
revenues reflect the recovery of fixed costs and a return on investment under
the contracts. Energy is generally sold at variable cost. The capacity and
energy components under these long-term contracts were as follows:
1995 1994 1993
----------------------------------------
(in thousands)
Capacity $25,870 $30,926 $33,805
Energy 18,598 18,456 21,202
============================================================
Total $44,468 $49,382 $55,007
============================================================
Capacity revenues decreased in 1995 and 1994, reflecting the scheduled
decline in capacity under long-term contracts.
Sales to affiliated companies vary from year to year depending on demand and
the availability and cost of generating resources at each company. These sales
have little impact on earnings.
The increase in other operating revenues for 1995 is primarily due to
increased amounts collected to recover newly-imposed county franchise fees.
These collections are also included in taxes other than income taxes and have no
impact on earnings. Other changes for 1995 and the change in 1994 are primarily
attributable to adjustments in the regulatory cost recovery clauses for
differences between recoverable costs and the amounts actually reflected in
revenues. See Notes 1 and 3 to the financial statements under "Revenues and
Regulatory Cost Recovery Clauses" and "Environmental Cost Recovery,"
respectively, for further discussion.
Kilowatt-hour sales for 1995 and percent changes in sales since 1993 are
reported below.
KWH Percent Change
------------ ---------------------------
1995 1995 1994 1993
------------ ---------------------------
(millions)
Residential 4,014 7.0% 1.1% 3.2%
Commercial 2,708 6.3 4.8 2.7
Industrial 1,795 (2.8) (9.0) (6.9)
Other 17 (0.1) - -
------------
Total retail 8,534 4.5 (0.3) 0.4
Sales for resale
Non-affiliates 1,397 (1.6) (2.8) 2.0
Affiliates 759 (13.1) (15.2) (14.8)
------------
Total 10,690 2.2 (2.1) (1.1)
==================================================================
Retail sales increased in 1995 due to hot summer weather, a 0.9 percent
increase in residential customers, and a 2.2 percent increase in commercial
customers. Industrial sales were lower due to the reclassification of a major
customer from the industrial to commercial class and temporary production delays
of other industrial customers. In 1994, retail sales decreased from the prior
year primarily due to mild summer weather and a decline in sales in the
industrial class, which reflected the loss of Monsanto and a lengthy shutdown of
another major customer.
In 1995, energy sales for resale to non-affiliates decreased 1.6 percent and
are predominantly related to unit power sales under long-term contracts to
Florida utilities. Energy sales to affiliated companies vary from year to year
as mentioned previously.
Expenses
Total operating expenses for 1995 increased $41.3 million or 8.5 percent from
1994. The increase is due to higher fuel and purchased power expenses, higher
maintenance expenses, and higher taxes other than income taxes, offset by lower
depreciation and amortization expenses. In 1994, total operating expenses
decreased $4.0 million or 0.8 percent from 1993 primarily due to decreased fuel
and purchased power expenses, offset by an increase in other operation expenses
and taxes.
Fuel and purchased power expenses for 1995 increased $30.1 million or 15.5
percent from 1994. The change reflects the increase in generation due to the
extreme weather conditions during the summer of 1995 and slightly higher fuel
II-145
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Gulf Power Company 1995 Annual Report
costs. In 1994, fuel and purchased power expenses declined $13.4 million or 6.5
percent from 1993 reflecting the decrease in generation due to the mild weather
and the lower cost of fuel.
The amount and sources of generation and the average cost of fuel per net
kilowatt-hour generated were as follows:
1995 1994 1993
-----------------------------
Total generation
(millions of kilowatt-hours) 9,828 9,559 9,558
Sources of generation
(percent)
Coal 99.5 99.8 99.4
Oil and gas .5 .2 .6
Average cost of fuel per net
kilowatt-hour generated
(cents)
Coal 2.08 2.00 2.03
Oil and gas 3.56 6.93 4.50
Total 2.09 2.01 2.05
- - ------------------------------------------------------------------
In 1995, other operation expenses decreased $0.5 million or 0.4 percent from
the 1994 level. The decrease is primarily attributable to a $9.4 million
reduction in the amortization costs of coal buyouts and renegotiation of coal
supply contracts. This was offset by a $7 million accrual for benefits to be
provided by the Company under a work force reduction program implemented during
the fourth quarter of 1995. These costs are further discussed in Notes 2 and 5
to the financial statements under "Work Force Reduction Programs" and "Fuel
Commitments," respectively. In 1994, other operation expenses increased $4.7
million due to additional costs related to the buyouts and renegotiation of coal
supply contracts and the Company's pro rata share of affiliated companies' work
force reduction costs.
Maintenance expense in 1995 increased $5.2 million or 11.2 percent from the
prior year. This is attributable to higher power production maintenance related
to non-recurring items and higher distribution maintenance. In 1994, maintenance
expense remained relatively flat reflecting no major changes in the scheduling
of maintenance of production facilities.
Depreciation and amortization expenses decreased $1.5 million or 2.7 percent
from 1994. The change is attributable to property which was fully amortized by
December 1994. Refer to Note 1 to the financial statements under "Depreciation
and Amortization" for further discussion.
Federal and state income taxes increased $0.1 million or 0.3 percent in 1995
due to a slight increase in taxable income. Taxes other than income taxes
increased $7.9 million or 18.9 percent due to an increase in county franchise
fees as mentioned previously. In 1994, federal income taxes increased $1.2
million due to an increase in taxable income. Other taxes increased $1.5 million
or 3.7 percent due to higher property taxes, gross receipt taxes, and franchise
fee collections. Changes in gross receipt taxes and franchise fee collections,
which are collected from customers, have no impact on earnings.
In 1995, interest expense decreased $2.5 million or 7.8 percent below the
prior year. The decline is mainly attributable to lower interest on long-term
debt reflecting a lower average principal balance outstanding. The decrease in
interest on long-term debt was partially offset by an increase in interest on
notes payable as a result of a higher average amount of short-term notes
outstanding. Interest expense in 1994 decreased $3.8 million or 10.5 percent
under the prior year. The decrease was a result of refinancing some of the
Company's higher-cost securities.
Effects of Inflation
The Company is subject to rate regulation and income tax laws that are based on
the recovery of historical costs. Therefore, inflation creates an economic loss
because the Company is recovering its cost of investments in dollars that have
less purchasing power. While the inflation rate has been relatively low in
recent years, it continues to have an adverse effect on the Company because of
the large investment in long-lived utility plant. Conventional accounting for
historical cost does not recognize this economic loss nor the partially
offsetting gain that arises through financing facilities with fixed-money
obligations, such as long-term debt and preferred stock. Any recognition of
inflation by regulatory authorities is reflected in the rate of return allowed.
II-146
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Gulf Power Company 1995 Annual Report
Future Earnings Potential
The results of operations for the past three years are not necessarily
indicative of future earnings potential. The level of future earnings depends on
numerous factors ranging from energy sales growth to a less regulated more
competitive environment.
A work force reduction program was implemented in the fourth quarter of 1995
that reduced earnings by $4.3 million. This action will assist in efforts to
control growth in future operating expenses.
The Florida Public Service Commission (FPSC) approved the Company's request
in December to increase the amount of its annual accrual to the accumulated
provision for property damage account from $1.2 million to $3.5 million due to
significant hurricane-related charges to the account during 1995. The approved
accrual increase is intended to restore the account balance to a reasonable
level within five years. Refer to Note 1 to the financial statements under
"Provision for Property Damage" for further discussion.
Future earnings in the near term will depend upon growth in energy sales,
which is subject to a number of factors. Traditionally, these factors have
included weather, competition, changes in contracts with neighboring utilities,
energy conservation practiced by customers, the elasticity of demand, and the
rate of economic growth in the Company's service area. However, the Energy
Policy Act of 1992 (Energy Act) is beginning to have a dramatic effect on the
future of the electric utility industry. The Energy Act promotes energy
efficiency, alternative fuel use, and increased competition for electric
utilities. The Company is positioning the business to meet the challenge of this
major change in the traditional practice of selling electricity. The Energy Act
allows independent power producers (IPPs) to access the Company's transmission
network in order to sell electricity to other utilities. This may enhance the
incentive for IPPs to build cogeneration plants for industrial and commercial
customers and sell excess energy generation to utilities. Also, electricity
sales for resale rates are being driven down by wholesale transmission access
and numerous potential new energy suppliers, including power marketers and
brokers. The Company is aggressively working to maintain and expand its share of
wholesale sales in the Southeastern power markets.
Currently, Florida law does not permit retail wheeling. Although the Energy
Act does not require transmission access to retail customers, retail wheeling
initiatives are rapidly evolving and becoming very prominent issues in several
states. Potential new federal legislation is being discussed, and legislation
allowing customer choice has already been introduced in Florida. In order to
address these initiatives, numerous questions must be resolved, with the most
complex ones relating to transmission pricing and recovery of stranded
investments. As the initiatives become a reality, the structure of the utility
industry could radically change. Therefore, unless the Company remains a
low-cost producer and provides quality service, the Company's retail energy
sales growth could be limited and this could significantly erode earnings.
Conversely, being the low-cost producer could provide significant opportunities
to increase market share and profitability by seeking new markets that evolve
with the changing regulation.
The future effect of cogeneration and small-power production facilities
cannot be fully determined at this time. One effect of cogeneration which the
Company has experienced was the loss in 1993 of its largest industrial customer,
Monsanto, which is discussed in "Earnings." The Company's strategy is to
identify and pursue profitable cogeneration projects in Northwest Florida.
The FPSC has set conservation goals for the Company, beginning in 1995, which
require programs to reduce 154 megawatts of summer peak demand and 65,000 KWH of
sales by the year 2004. In 1995, the FPSC approved the Company's programs to
accomplish these goals. The Company can experience net growth as long as the
filed programs achieve the intended reductions in peak demand and KWH sales. In
response to these goals and seeking to remain competitive with other electric
utilities, the Company has developed initiatives which emphasize price
flexibility and competitive offering of energy efficiency products and services.
These initiatives will enable customers to lower or alter their peak energy
requirements. Besides promoting energy efficiency, another benefit of these
initiatives could be the ability to defer the need to construct some generating
facilities further into the future.
II-147
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Gulf Power Company 1995 Annual Report
On September 27, 1995, the Company filed a petition with the FPSC which seeks
approval for a new optional Commercial/Industrial Service (CIS) rider, which
would be applicable to the rate schedules serving the Company's largest and most
at-risk customers who are able to show they have viable alternatives for
electric power supply. The CIS rider would provide the flexibility needed to
enable the Company to offer its services in a more competitive manner to these
customers. The FPSC approval process is expected to take approximately 8 months.
Compliance costs related to the Clean Air Act Amendments of 1990 (Clean Air
Act) could reduce earnings if such costs are not fully recovered. The Clean Air
Act is discussed later under "Environmental Matters." Also, state of Florida
legislation adopted in 1993 that provides for recovery of prudent environmental
compliance costs is discussed in Note 3 to the financial statements under
"Environmental Cost Recovery."
The Company is subject to the provisions of Financial Accounting Standards
Board (FASB) Statement No. 71, Accounting for the Effects of Certain Types of
Regulation. In the event that a portion of the Company's operations is no longer
subject to these provisions, the Company would be required to write off related
regulatory assets and liabilities and determine if any other assets have been
impaired. See Note 1 to the financial statements under "Regulatory Assets and
Liabilities" for additional information.
New Accounting Standards
The FASB has issued Statement No. 121, Accounting for the Impairment of
Long-Lived Assets and Long-Lived Assets to Be Disposed Of. This statement
requires that long-lived assets be reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount for an asset may not
be recoverable. This statement also imposes stricter criteria for regulatory
assets by requiring that such assets be probable of future recovery at each
balance sheet date. The Company adopted the new rules January 1, 1996, with no
material effect on the financial statements. However, this conclusion may change
in the future as competitive factors influence wholesale and retail pricing in
the utility industry.
FINANCIAL CONDITION
Overview
The principal changes in the Company's financial condition during 1995 were
gross property additions of $63.1 million and an increase of $27 million in
notes payable. Funds for the property additions were provided by internal
sources. The increase in short-term notes payable is primarily attributable to a
$22 million note issued in relation to a payment made to a coal supplier for a
new arrangement under an existing coal contract. See the Statements of Cash
Flows and Note 5 to the financial statements under "Fuel Commitments" for
further details.
Financing Activities
The Company continued to lower its financing costs by retiring issues in 1995.
Retirements, including maturities during 1995, totaled $1.8 million of first
mortgage bonds, $0.1 million of pollution control bonds, $13.3 million of bank
notes and other long-term debt, and $1 million of preferred stock. (See the
Statements of Cash Flows for further details.)
Composite financing rates for the years 1993 through 1995 as of year end were
as follows:
1995 1994 1993
------------------------------
Composite interest rate on
long-term debt 6.5% 6.5% 7.1%
Composite preferred stock
dividend rate 6.4% 6.6% 6.5%
- - ----------------------------------------------------------------
The composite interest rate on long-term debt remained constant at 6.5% from
1994 primarily due to no new issues or refinancings during 1995. The decrease in
the composite interest rate from 1993 to 1994 reflects the Company's efforts to
refinance higher-cost debt. The decrease in the composite preferred dividend
rate in 1995 is primarily due to a decrease in dividends on the Company's
adjustable rate preferred stock, reflecting lower interest rates.
II-148
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Gulf Power Company 1995 Annual Report
Capital Requirements for Construction
The Company's gross property additions, including those amounts related to
environmental compliance, are budgeted at $209 million for the three years
beginning in 1996 ($71 million in 1996, $67 million in 1997, and $71 million in
1998). The estimates of property additions for the three-year period include $9
million committed to meeting the requirements of the Clean Air Act, the cost of
which is expected to be recovered through the Environmental Cost Recovery Clause
(ECRC), which is discussed in Note 3 to the financial statements under
"Environmental Cost Recovery." Actual construction costs may vary from this
estimate because of factors such as changes in business conditions; changes in
environmental regulations; revised load projections; the cost and efficiency of
construction labor, equipment, and materials; and the cost of capital. In
addition, there can be no assurance that costs related to capital expenditures
for the Company will be fully recovered. The Company does not have any baseload
generating plants under construction, and current energy demand forecasts do not
indicate a need for any additional baseload facilities until well into the
future. However, significant construction related to maintaining and upgrading
transmission and distribution facilities and generating plants will continue.
Other Capital Requirements
In addition to the funds needed for the construction program, approximately $109
million will be required by the end of 1998 in connection with maturities of
long-term debt. Also, the Company plans to continue a program to retire
higher-cost debt and preferred stock and replace these obligations with
lower-cost capital as market conditions and terms of the instruments permit.
Environmental Matters
In November 1990, the Clean Air Act was signed into law. Title IV of the Clean
Air Act -- the acid rain compliance provision of the law -- has significantly
impacted the Company. Specific reductions in sulfur dioxide and nitrogen oxide
emissions from fossil-fired generating plants are required in two phases. Phase
I compliance began in 1995 and initially affected 28 generating units of The
Southern Company. As a result of The Southern Company's compliance strategy, an
additional 22 generating units were brought into compliance with Phase I
requirements. Phase II compliance is required by 2000, and all fossil-fired
generating plants will be affected.
In 1993, the Florida Legislature adopted legislation that allows a utility to
petition the FPSC for recovery of prudent environmental compliance costs that
are not being recovered through base rates or any other recovery mechanism. The
legislation is discussed in Note 3 to the financial statements under
"Environmental Cost Recovery." Substantially all of the costs for the Clean Air
Act and other new legislation discussed below is expected to be recovered
through the ECRC.
In 1995, the Environmental Protection Agency (EPA) began issuing annual
sulfur dioxide emission allowances through the allowance trading program. An
emission allowance is the authority to emit one ton of sulfur dioxide during a
calendar year. The method for issuing allowances is based on the fossil fuel
consumed from 1985 through 1987 for each affected generating unit. Emission
allowances are transferable and can be bought, sold, or banked and used in the
future.
The sulfur dioxide emission allowance program is expected to minimize the
cost of compliance. The Southern Company's sulfur dioxide compliance strategy is
designed to use allowances as a compliance option.
The Southern Company achieved Phase I sulfur dioxide compliance at the
affected plants by switching to low-sulfur coal, which required some equipment
upgrades. This compliance strategy resulted in unused emission allowances being
banked for later use. Compliance with nitrogen oxide emission limits was
achieved by the installation of new control equipment at 22 generating units.
Construction expenditures for Phase I compliance totaled approximately $320
million for The Southern Company, including approximately $50 million for the
Company through 1995.
For Phase II sulfur dioxide compliance, The Southern Company could use
emission allowances banked during Phase I, increase fuel switching, install flue
gas desulfurization equipment at selected plants, and/or purchase more
allowances depending on the price and availability of allowances. Also, in Phase
II, equipment to control nitrogen oxide emissions will be installed on
additional system fossil-fired units as required to meet Phase II limits.
Therefore, during the period 1996 to 2000, the current compliance strategy could
II-149
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Gulf Power Company 1995 Annual Report
require total construction expenditures of approximately $150 million for The
Southern Company, including approximately $10 million for the Company. However,
the full impact of Phase II compliance cannot now be determined with certainty,
pending the continuing development of a market for emission allowances, the
completion of EPA regulations, and the possibility of new emission reduction
technologies.
Following adoption of legislation in April of 1992 allowing electric
utilities in Florida to seek FPSC approval of their Clean Air Act Compliance
Plans, the Company filed its petition for approval. The FPSC approved the
Company's plan for Phase I compliance, deferring until a later date approval of
its Phase II Plan.
An average increase of up to 2 percent in revenue requirements from the
Company's customers could be necessary to fully recover the cost of compliance
for both Phase I and Phase II of Title IV of the Clean Air Act. Compliance costs
include construction expenditures, increased costs for switching to low-sulfur
coal, and costs related to emission allowances.
Title III of the Clean Air Act requires a multi-year EPA study of power plant
emissions of hazardous air pollutants. The EPA is scheduled to submit a report
to Congress on the results of this study in 1996. The report will include a
decision on whether additional regulatory control of these substances is
warranted. Compliance with any new control standards could result in significant
additional costs. The impact of new standards -- if any -- will depend on the
development and implementation of applicable regulations.
The EPA is evaluating the need to revise the ambient air quality standards
for particulate matter and ozone. The impact of any new standard will depend on
the level chosen for the standard and cannot be determined at this time.
In 1996, the EPA may issue revised rules on air quality control regulations
related to stack height requirements of the Clean Air Act. The full impact of
the final rules cannot be determined at this time, pending their development and
implementation.
In 1993, the EPA issued a ruling confirming the non-hazardous status of coal
ash. However, the EPA has until 1998 to classify co-managed utility wastes --
coal ash and other utility wastes -- as either non-hazardous or hazardous. If
the EPA classifies the co-managed wastes as hazardous, then substantial
additional costs for the management of such wastes may be required. The full
impact of any change in the regulatory status will depend on the subsequent
development of co-managed waste requirements.
The Company must comply with other environmental laws and regulations that
cover the handling and disposal of hazardous waste. Under these various laws and
regulations, the Company could incur costs to clean up properties currently or
previously owned. The Company conducts studies to determine the extent of any
required cleanup costs and has recognized in the financial statements costs to
clean up known sites. Additional sites may require environmental remediation for
which the Company may be liable for a portion or all required cleanup costs. For
additional information, see Note 3 to the financial statements under
"Environmental Cost Recovery."
Several major pieces of environmental legislation are being considered for
reauthorization or amendment by Congress. These include: the Clean Air Act; the
Clean Water Act; the Comprehensive Environmental Response, Compensation, and
Liability Act; the Resource Conservation and Recovery Act; the Toxic Substances
Control Act; and the Endangered Species Act. Changes to these laws could affect
many areas of the Company's operations. The full impact of these requirements
cannot be determined at this time, pending the development and implementation of
applicable regulations.
Compliance with possible additional legislation related to global climate
change, electromagnetic fields, and other environmental and health concerns
could significantly affect the Company. The impact of new legislation -- if any
- - -- will depend on the subsequent development and implementation of applicable
regulations. In addition, the potential exists for liability as the result of
lawsuits alleging damages caused by electromagnetic fields.
II-150
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Gulf Power Company 1995 Annual Report
Sources of Capital
At December 31, 1995, the Company had $0.7 million of cash and cash equivalents
and $25 million of unused committed lines of credit with banks to meet its
short-term cash needs. See Note 5 to the financial statements under "Bank Credit
Arrangements" for additional information.
It is anticipated that the funds required for construction and other
purposes, including compliance with environmental regulations, will be derived
from operations; the sale of additional first mortgage bonds, pollution control
bonds, and preferred stock; bank notes; and capital contributions from The
Southern Company. The Company is required to meet certain coverage requirements
specified in its mortgage indenture and corporate charter to issue new first
mortgage bonds and preferred stock. The Company's coverage ratios are sufficient
to permit, at present interest and preferred dividend levels, any foreseeable
security sales. The amount of securities which the Company will be permitted to
issue in the future will depend upon market conditions and other factors
prevailing at that time.
II-151
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF INCOME
For the Years Ended December 31, 1995, 1994, and 1993
Gulf Power Company 1995 Annual Report
=================================================================================================
1995 1994 1993
- - -------------------------------------------------------------------------------------------------
(in thousands)
<S> <C> <C> <C>
Operating Revenues:
Revenues $600,458 $561,460 $559,976
Revenues from affiliates 18,619 17,353 23,166
- - -------------------------------------------------------------------------------------------------
Total operating revenues 619,077 578,813 583,142
- - -------------------------------------------------------------------------------------------------
Operating Expenses:
Operation-
Fuel 185,274 161,168 170,485
Purchased power from non-affiliates 8,594 6,761 4,386
Purchased power from affiliates 29,966 25,819 32,273
Other 113,397 113,879 109,164
Maintenance 51,917 46,700 46,004
Depreciation and amortization 55,104 56,615 55,309
Taxes other than income taxes 49,598 41,701 40,204
Federal and state income taxes (Note 8) 34,065 33,957 32,730
- - -------------------------------------------------------------------------------------------------
Total operating expenses 527,915 486,600 490,555
- - -------------------------------------------------------------------------------------------------
Operating Income 91,162 92,213 92,587
Other Income (Expense):
Allowance for equity funds used during
construction (Note 1) 36 450 512
Interest income 2,877 1,429 1,328
Other, net (1,261) (780) (1,238)
Gain on sale of investment securities - - 3,820
Income taxes applicable to other income (121) 95 (921)
- - -------------------------------------------------------------------------------------------------
Income Before Interest Charges 92,693 93,407 96,088
- - -------------------------------------------------------------------------------------------------
Interest Charges:
Interest on long-term debt 23,294 27,124 31,344
Other interest charges 1,674 2,442 2,877
Interest on notes payable 2,931 1,509 870
Amortization of debt discount, premium, and expense, net 2,014 1,834 1,412
Allowance for debt funds used during
construction (Note 1) (187) (656) (454)
- - -------------------------------------------------------------------------------------------------
Net interest charges 29,726 32,253 36,049
- - -------------------------------------------------------------------------------------------------
Net Income 62,967 61,154 60,039
Dividends on Preferred Stock 5,813 5,925 5,728
- - -------------------------------------------------------------------------------------------------
Net Income After Dividends on Preferred Stock $ 57,154 $ 55,229 $ 54,311
=================================================================================================
The accompanying notes are an integral part of these statements.
</TABLE>
II-152
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 1995, 1994, and 1993
Gulf Power Company 1995 Annual Report
<S> <C> <C> <C>
=============================================================================================================
1995 1994 1993
- - -------------------------------------------------------------------------------------------------------------
(in thousands)
Operating Activities:
Net income $ 62,967 $ 61,154 $ 60,039
Adjustments to reconcile net income to net
cash provided by operating activities --
Depreciation and amortization 75,293 86,098 72,111
Deferred income taxes and investment tax credits 390 (6,986) 5,347
Allowance for equity funds used during construction (36) (450) (512)
Accumulated provision for property damage (19,024) 1,013 817
Deferred costs of 1995 coal contract renegotiation (12,177) - -
Other, net 4,664 3,885 (1,681)
Changes in certain current assets and liabilities --
Receivables, net (12,210) 3,540 12,867
Inventories (618) (13,901) 5,574
Payables 18,258 (10,159) 5,386
Taxes accrued (2,803) 2,548 (3,280)
Current costs of 1995 coal contract renegotiation (9,859) - -
Other (4,894) (1,938) (6,224)
- - -------------------------------------------------------------------------------------------------------------
Net cash provided from operating activities 99,951 124,804 150,444
- - -------------------------------------------------------------------------------------------------------------
Investing Activities:
Gross property additions (63,113) (78,869) (78,562)
Other 4,401 (3,493) (5,328)
- - -------------------------------------------------------------------------------------------------------------
Net cash used for investing activities (58,712) (82,362) (83,890)
- - -------------------------------------------------------------------------------------------------------------
Financing Activities and Capital Contributions:
Proceeds:
Preferred stock - - 35,000
First mortgage bonds - - 75,000
Pollution control bonds - 42,000 53,425
Capital contributions from parent 58 98 11
Other long-term debt - 32,108 25,000
Retirements:
Preferred stock (1,000) (1,000) (21,060)
First mortgage bonds (1,750) (48,856) (88,809)
Pollution control bonds (125) (42,100) (40,650)
Other long-term debt (13,314) (24,240) (7,736)
Notes payable, net 27,000 47,447 (37,947)
Payment of preferred stock dividends (5,813) (5,925) (5,728)
Payment of common stock dividends (46,400) (44,000) (41,800)
Miscellaneous (117) (2,648) (6,888)
- - -------------------------------------------------------------------------------------------------------------
Net cash used for financing activities (41,461) (47,116) (62,182)
- - -------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Cash and Cash Equivalents (222) (4,674) 4,372
Cash and Cash Equivalents at Beginning of Year 902 5,576 1,204
- - -------------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Year $ 680 $ 902 $ 5,576
=============================================================================================================
Supplemental Cash Flow Information:
Cash paid during the year for --
Interest (net of amount capitalized) $26,161 $30,139 $28,470
Income taxes $38,537 $43,089 $27,865
- - -------------------------------------------------------------------------------------------------------------
( ) Denotes use of cash.
The accompanying notes are an integral part of these statements.
</TABLE>
II-153
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
At December 31, 1995 and 1994
Gulf Power Company 1995 Annual Report
<S> <C> <C>
Utility Plant:
================================================================================
ASSETS 1995 1994
- - --------------------------------------------------------------------------------
(in thousands)
Plant in service (Notes 1 and 6) $1,695,814 $1,656,367
Less accumulated provision for depreciation 658,806 622,911
- - --------------------------------------------------------------------------------
1,037,008 1,033,456
Construction work in progress 26,301 24,288
- - --------------------------------------------------------------------------------
Total 1,063,309 1,057,744
- - --------------------------------------------------------------------------------
Other Property and Investments 740 7,997
- - --------------------------------------------------------------------------------
Current Assets:
Cash and cash equivalents 680 902
Receivables-
Customer accounts receivable 69,166 57,637
Other accounts and notes receivable 3,393 2,268
Affiliated companies 802 1,079
Accumulated provision for uncollectible accounts (768) (600)
Fossil fuel stock, at average cost 37,875 35,686
Materials and supplies, at average cost 33,686 35,257
Current portion of deferred coal contract costs (Note 5) 12,767 2,521
Regulatory clauses under recovery (Note 1) 3,432 5,002
Prepaid income taxes (Note 8) 4,232 -
Other prepayments 8,000 4,354
Vacation pay deferred 4,419 4,172
- - --------------------------------------------------------------------------------
Total 177,684 148,278
- - --------------------------------------------------------------------------------
Deferred Charges:
Deferred charges related to income taxes (Note 8) 29,093 30,433
Debt expense and loss, being amortized 20,459 22,119
Deferred coal contract costs (Note 5) 33,768 38,169
Deferred storm charges (Note 1) 7,502 -
Miscellaneous 9,304 10,802
- - --------------------------------------------------------------------------------
Total 100,126 101,523
- - --------------------------------------------------------------------------------
Total Assets $1,341,859 $1,315,542
================================================================================
The accompanying notes are an integral part of these statements.
</TABLE>
II-154
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS (continued)
At December 31, 1995 and 1994
Gulf Power Company 1995 Annual Report
<S> <C> <C>
========================================================================================
CAPITALIZATION AND LIABILITIES 1995 1994
- - ----------------------------------------------------------------------------------------
(in thousands)
Capitalization (See accompanying statements):
Common stock equity (Note 11) $ 436,242 $ 425,472
Preferred stock 89,602 89,602
Long-term debt 323,376 356,393
- - ----------------------------------------------------------------------------------------
Total 849,220 871,467
- - ----------------------------------------------------------------------------------------
Current Liabilities:
Preferred stock due within one year - 1,000
Long-term debt due within one year (Note 10) 31,548 13,439
Notes payable 80,500 53,500
Accounts payable-
Affiliated companies 14,447 9,132
Other 27,196 14,524
Customer deposits 13,195 13,609
Taxes accrued-
Federal and state income - 5,990
Other 9,547 7,475
Interest accrued 5,719 6,106
Regulatory clauses over recovery (Note 1) 2,800 3,960
Vacation pay accrued 4,419 4,172
Miscellaneous 7,356 7,828
- - ----------------------------------------------------------------------------------------
Total 196,727 140,735
- - ----------------------------------------------------------------------------------------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes (Note 8) 162,345 151,681
Deferred credits related to income taxes (Note 8) 67,481 71,964
Accumulated deferred investment tax credits 36,052 38,391
Accumulated provision for property damage (Note 1) - 11,522
Accumulated provision for postretirement benefits (Note 2) 16,301 13,680
Miscellaneous 13,733 16,102
- - ----------------------------------------------------------------------------------------
Total 295,912 303,340
- - ----------------------------------------------------------------------------------------
Commitments and Contingent Matters (Notes 1, 2, 3, 4, 5, and 7)
Total Capitalization and Liabilities $1,341,859 $1,315,542
========================================================================================
The accompanying notes are an integral part of these statements.
</TABLE>
II-155
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CAPITALIZATION
At December 31, 1995 and 1994
Gulf Power Company 1995 Annual Report
<S> <C> <C> <C> <C>
==================================================================================================
1995 1994 1995 1994
- - --------------------------------------------------------------------------------------------------
(in thousands) (percent of total)
Common Stock Equity:
Common stock, without par value --
Authorized and outstanding --
992,717 shares in 1995 and 1994 $ 38,060 $ 38,060
Paid-in capital 218,438 218,380
Premium on preferred stock 81 81
Retained earnings (Note 11) 179,663 168,951
- - --------------------------------------------------------------------------------------------------
Total common stock equity 436,242 425,472 51.4% 48.8%
- - --------------------------------------------------------------------------------------------------
Cumulative Preferred Stock:
$10 par value --
Authorized -- 10,000,000 shares,
Outstanding -- 2,580,000 shares at December 31, 1995
$25 stated capital --
6.72% 20,000 20,000
7.00% 14,500 14,500
7.30% 15,000 15,000
Adjustable Rate -- at January 1, 1996: 4.67% 15,000 15,000
$100 par value --
Authorized -- 801,626 shares
Outstanding -- 251,026 shares at December 31, 1995
4.64% 5,102 5,102
5.16% 5,000 5,000
5.44% 5,000 5,000
7.52% 5,000 5,000
7.88% 5,000 5,000
- - --------------------------------------------------------------------------------------------------
Total (annual dividend requirement -- $5,691,300) 89,602 89,602 10.5 10.3
- - --------------------------------------------------------------------------------------------------
Cumulative Preferred Stock Subject to Mandatory Redemption:
$100 par value --
Authorized -- 0 shares
Outstanding -- 0 shares at December 31, 1995
11.36% Series - 1,000
- - --------------------------------------------------------------------------------------------------
Total - 1,000
- - --------------------------------------------------------------------------------------------------
Less amount due within one year - 1,000
- - --------------------------------------------------------------------------------------------------
Total excluding amount due within one year - - - -
- - --------------------------------------------------------------------------------------------------
</TABLE>
II-156
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CAPITALIZATION (continued)
At December 31, 1995 and 1994
Gulf Power Company 1995 Annual Report
<S> <C> <C> <C> <C> <C>
============================================================================================================================
1995 1994 1995 1994
- - ----------------------------------------------------------------------------------------------------------------------------
(in thousands) (percent of total)
First mortgage bonds --
Maturity Interest Rates
August 1, 1997 5.875% 25,000 25,000
April 1, 1998 5.55% 15,000 15,000
July 1, 1998 5.00% 30,000 30,000
July 1, 2003 6.125% 30,000 30,000
September 1, 2008 9.00% 930 2,680
December 1, 2021 8.75% 50,000 50,000
- - ----------------------------------------------------------------------------------------------------------------------------
Total first mortgage bonds 150,930 152,680
Pollution control obligations (Note 9) 169,630 169,755
Other long-term debt (Note 9) 37,074 50,388
Unamortized debt premium (discount), net (2,710) (2,991)
- - ----------------------------------------------------------------------------------------------------------------------------
Total long-term debt (annual interest
requirement -- $23,154,000) 354,924 369,832
Less amount due within one year (Note 10) 31,548 13,439
- - ----------------------------------------------------------------------------------------------------------------------------
Long-term debt excluding amount due within one year 323,376 356,393 38.1 40.9
- - ----------------------------------------------------------------------------------------------------------------------------
Total Capitalization $ 849,220 $ 871,467 100.0% 100.0%
============================================================================================================================
The accompanying notes are an integral part of these statements.
</TABLE>
II-157
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF RETAINED EARNINGS
For the Years Ended December 31, 1995, 1994, and 1993
Gulf Power Company 1995 Annual Report
<S> <C> <C> <C>
===========================================================================================================================
1995 1994 1993
- - ---------------------------------------------------------------------------------------------------------------------------
(in thousands)
<S> <C> <C> <C>
Balance at Beginning of Year $168,951 $157,773 $146,771
Net income after dividends on preferred stock 57,154 55,229 54,311
Cash dividends on common stock (46,400) (44,000) (41,800)
Preferred stock transactions, net (42) (51) (1,509)
- - ---------------------------------------------------------------------------------------------------------------------------
Balance at End of Year (Note 11) $179,663 $168,951 $157,773
===========================================================================================================================
STATEMENTS OF PAID-IN CAPITAL
For the Years Ended December 31, 1995, 1994, and 1993
Gulf Power Company 1995 Annual Report
===========================================================================================================================
1995 1994 1993
- - ---------------------------------------------------------------------------------------------------------------------------
(in thousands)
Balance at Beginning of Year $218,380 $218,282 $218,271
Contributions to capital by parent company 58 98 11
- - ---------------------------------------------------------------------------------------------------------------------------
Balance at End of Year $218,438 $218,380 $218,282
===========================================================================================================================
The accompanying notes are an integral part of these statements.
</TABLE>
II-158
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Gulf Power Company 1995 Annual Report
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General
Gulf Power Company is a wholly owned subsidiary of The Southern Company, which
is the parent company of five operating companies, a system service company,
Southern Communications Services (Southern Communications), Southern Electric
International (Southern Electric), Southern Nuclear Operating Company (Southern
Nuclear), The Southern Development and Investment Group (Southern Development),
and other direct and indirect subsidiaries. The operating companies (Alabama
Power Company, Georgia Power Company, Gulf Power Company, Mississippi Power
Company, and Savannah Electric and Power Company) provide electric service in
four Southeastern states. Gulf Power Company provides electric service to the
Northwest Panhandle of Florida. Contracts among the companies -- dealing with
jointly owned generating facilities, interconnecting transmission lines, and the
exchange of electric power -- are regulated by the Federal Energy Regulatory
Commission (FERC) or the Securities and Exchange Commission (SEC). The system
service company provides, at cost, specialized services to The Southern Company
and subsidiary companies. Southern Communications provides digital wireless
communications services to the operating companies and also markets these
services to the public within the Southeast. Southern Electric designs, builds,
owns and operates power production and delivery facilities and provides a broad
range of technical services to industrial companies and utilities in the United
States and a number of international markets. Southern Nuclear provides services
to The Southern Company's nuclear power plants. Southern Development develops
new business opportunities related to energy products and services.
The Southern Company is registered as a holding company under the Public
Utility Holding Company Act of 1935 (PUHCA). Both The Southern Company and its
subsidiaries are subject to the regulatory provisions of the PUHCA. The Company
is also subject to regulation by the FERC and the Florida Public Service
Commission (FPSC). The Company follows generally accepted accounting principles
and complies with the accounting policies and practices prescribed by the FPSC.
The preparation of financial statements in conformity with generally accepted
accounting principles requires the use of estimates, and the actual results may
differ from those estimates.
Certain prior years' data presented in the financial statements have been
reclassified to conform with current year presentation.
Regulatory Assets and Liabilities
The Company is subject to the provisions of Financial Accounting Standards Board
(FASB) Statement No. 71, Accounting for the Effects of Certain Types of
Regulation. Regulatory assets represent probable future revenues to the Company
associated with certain costs that are expected to be recovered from customers
through the ratemaking process. Regulatory liabilities represent probable future
reductions in revenues associated with amounts that are to be credited to
customers through the ratemaking process. Regulatory assets and (liabilities)
reflected in the Balance Sheets at December 31 relate to:
1995 1994
------------------------
(in thousands)
Current & deferred
coal contract costs $ 46,535 $ 40,690
Deferred income taxes 29,093 30,433
Deferred loss on reacquired debt 17,015 18,494
Environmental remediation 5,789 7,800
Vacation pay 4,419 4,172
Regulatory clauses under
recovery, net 632 1,042
Deferred income tax credits (67,481) (71,964)
Deferred storm charges 7,502 -
Accumulated provision for
property damage - (11,522)
Other, net (1,510) (2,691)
- - ----------------------------------------------------------------
Total $ 41,994 $ 16,454
================================================================
In the event that a portion of the Company's operations is no longer subject
to the provisions of Statement No. 71, the Company would be required to write
off related regulatory assets and liabilities. In addition, the Company would be
required to determine any impairment to other assets, including plant, and write
down the assets, if impaired, to their fair values.
II-159
<PAGE>
NOTES (continued)
Gulf Power Company 1995 Annual Report
Revenues and Regulatory Cost Recovery Clauses
The Company accrues revenues for service rendered but unbilled at the end of
each fiscal period. Fuel costs are expensed as the fuel is used. The Company's
electric rates include provisions to periodically adjust billings for
fluctuations in fuel and the energy component of purchased power costs. The
Company also has similar cost recovery clauses for energy conservation costs,
purchased power capacity costs, and environmental compliance costs. Revenues are
adjusted monthly for differences between recoverable costs and amounts actually
reflected in current rates.
The Company has a diversified base of customers. No single customer or
industry comprises 10 percent or more of revenues. In 1995, uncollectible
accounts continued to average significantly less than 1 percent of revenues.
Depreciation and Amortization
Depreciation of the original cost of depreciable utility plant in service is
provided primarily by using composite straight-line rates, which approximated
3.6 percent in 1995 and 3.8 percent in 1994 and 1993. When property subject to
depreciation is retired or otherwise disposed of in the normal course of
business, its cost -- together with the cost of removal, less salvage -- is
charged to the accumulated provision for depreciation. Minor items of property
included in the original cost of the plant are retired when the related property
unit is retired. Also, the provision for depreciation expense includes an amount
for the expected cost of removal of facilities. The decrease in 1995 is
attributable to property which was fully amortized by December 1994.
Income Taxes
The Company uses the liability method of accounting for deferred income taxes
and provides deferred income taxes for all significant income tax temporary
differences. Investment tax credits utilized are deferred and amortized to
income over the average lives of the related property. The Company is included
in the consolidated federal income tax return of The Southern Company. See Note
8 for further information related to income taxes.
Allowance for Funds Used During Construction
(AFUDC)
AFUDC represents the estimated debt and equity costs of capital funds that are
necessary to finance the construction of new facilities. While cash is not
realized currently from such allowance, it increases the revenue requirement
over the service life of the plant through a higher rate base and higher
depreciation expense. The FPSC-approved composite rate used to calculate AFUDC
was 7.27 percent for 1995, 1994, and the second half of 1993 and 8.03 percent
for the first half of 1993. AFUDC amounts for 1995, 1994, and 1993 were $223
thousand, $1.1 million, and $966 thousand, respectively. The decrease in 1995 is
primarily due to the completion of major construction projects at Plant Daniel
at the end of 1994.
Utility Plant
Utility plant is stated at original cost. Original cost includes: materials;
labor; minor items of property; appropriate administrative and general costs;
payroll-related costs such as taxes, pensions, and other benefits; and the
estimated cost of funds used during construction. The cost of maintenance,
repairs, and replacement of minor items of property is charged to maintenance
expense. The cost of replacements of property (exclusive of minor items of
property) is charged to utility plant.
Cash and Cash Equivalents
For purposes of the Statements of Cash Flows, temporary cash investments are
considered cash equivalents. Temporary cash investments are securities with
original maturities of 90 days or less.
II-160
<PAGE>
NOTES (continued)
Gulf Power Company 1995 Annual Report
Financial Instruments
In accordance with FASB Statement No. 107, Disclosure About Fair Values of
Financial Instruments, financial instruments of the Company, for which the
carrying amounts do not approximate fair value, are shown in the table below as
of December 31:
1995
----------------------------
Carrying Fair
Amount Value
----------------------------
(in thousands)
Long-term debt $354,924 $365,305
- - -------------------------------------------------------------
1994
----------------------------
Carrying Fair
Amount Value
----------------------------
(in thousands)
Long-term debt $369,832 $355,019
Preferred stock subject to
mandatory redemption 1,000 1,030
- - -------------------------------------------------------------
The fair values for long-term debt and preferred stock subject to mandatory
redemption were based on either closing market prices or closing prices of
comparable instruments.
Materials and Supplies
Generally, materials and supplies include the cost of transmission,
distribution, and generating plant materials. Materials are charged to inventory
when purchased and then expensed or capitalized to plant, as appropriate, when
installed.
Provision for Injuries and Damages
The Company is subject to claims and suits arising in the ordinary course of
business. As permitted by regulatory authorities, the Company provides for the
uninsured costs of injuries and damages by charges to income amounting to $1.2
million annually. The expense of settling claims is charged to the provision to
the extent available. The accumulated provision of $1.7 million and $2.5 million
at December 31, 1995 and 1994, respectively, is included in miscellaneous
current liabilities in the accompanying Balance Sheets.
Provision for Property Damage
The Company is self-insured for the full cost of storm and other damage to its
transmission and distribution property. At December 31, 1995, in accordance with
the FPSC's order, the accumulated provision for property damage had a negative
balance of $7.5 million as the result of charges for expenses relating to
Hurricanes Erin and Opal. The negative balance was reclassified to deferred
storm charges in the accompanying Balance Sheets. The FPSC approved the
Company's request in December to increase the amount of its annual accrual to
the accumulated provision for property damage account from $1.2 million to $3.5
million, effective October 1, 1995. The approved accrual increase is intended to
restore the account balance to a reasonable level within five years. The FPSC
also ordered the Company to file within six months a study addressing the
appropriate accumulated provision account balance and annual accrual amount. At
December 31, 1994, the accumulated provision for property damage amounted to
$11.5 million. The expense of repairing damages from major storms and other
uninsured property damages are charged to the provision account.
2. RETIREMENT BENEFITS
Pension Plan
The Company has a defined benefit, trusteed, non-contributory pension plan that
covers substantially all regular employees. Benefits are based on one of the
following formulas: years of service and final average pay or years of service
and a flat-dollar benefit. The Company uses the "entry age normal method with a
frozen initial liability" actuarial method for funding purposes, subject to
limitations under federal income tax regulations. Amounts funded to the pension
trust fund are primarily invested in equity and fixed-income securities. FASB
Statement No. 87, Employers' Accounting for Pensions, requires use of the
"projected unit credit" actuarial method for financial reporting purposes.
II-161
<PAGE>
NOTES (continued)
Gulf Power Company 1995 Annual Report
Postretirement Benefits
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 or to the extent required by the Company's
regulatory commissions. Amounts funded are primarily invested in equity and
fixed-income securities. FASB Statement No. 106, Employers' Accounting for
Postretirement Benefits Other Than Pensions, requires that medical care and life
insurance benefits for retired employees be accounted for on an accrual basis
using a specified actuarial method, "benefit/years-of-service."
Funded Status and Cost of Benefits
The following tables show actuarial results and assumptions for pension and
postretirement insurance benefits as computed under the requirements of FASB
Statement Nos. 87 and 106, respectively. The funded status of the plans at
December 31 was as follows:
Pension
-------------------------
1995 1994
-------------------------
(in thousands)
Actuarial present value of
benefit obligation:
Vested benefits $ 87,652 $ 73,552
Non-vested benefits 4,284 3,016
- - ------------------------------------------------------------------
Accumulated benefit obligation 91,936 76,568
Additional amounts related to
projected salary increases 29,073 29,451
- - ------------------------------------------------------------------
Projected benefit obligation 121,009 106,019
Less:
Fair value of plan assets 180,980 151,337
Unrecognized net gain (48,438) (36,599)
Unrecognized prior service cost 2,578 2,802
Unrecognized transition asset (7,187) (8,034)
- - ------------------------------------------------------------------
Prepaid asset recognized in
the Balance Sheets $ 6,924 $ 3,487
==================================================================
Postretirement Benefits
---------------------------
1995 1994
---------------------------
(in thousands)
Actuarial present value of
benefit obligation:
Retirees and dependents $ 9,759 $10,800
Employees eligible to retire 4,921 4,043
Other employees 17,646 19,639
- - ----------------------------------------------------------------
Accumulated benefit obligation 32,326 34,482
Less:
Fair value of plan assets 7,050 5,740
Unrecognized net loss (gain) 1,538 (458)
Unrecognized transition
obligation 7,437 15,520
- - ----------------------------------------------------------------
Accrued liability recognized in
the Balance Sheets $16,301 $13,680
================================================================
In 1995, the Company announced a cost sharing program for postretirement
benefits. The program establishes limits on amounts the Company will pay to
provide future retiree postretirement benefits. This change reduced the 1995
accumulated postretirement benefit obligation by approximately $7.1 million.
The weighted average rates assumed in the actuarial calculations were:
1995 1994 1993
-----------------------------
Discount 7.3% 8.0% 7.5%
Annual salary increase 4.8% 5.5% 5.0%
Long-term return on plan
assets 8.5% 8.5% 8.5%
- - ---------------------------------------------------------------
An additional assumption used in measuring the accumulated postretirement
benefit obligation was a weighted average medical care cost trend rate of 9.8
percent for 1995, decreasing to 5.3 percent through the year 2005 and remaining
at that level thereafter. An annual increase in the assumed medical care cost
trend rate of 1 percent would increase the accumulated benefit obligation at
December 31, 1995, by $2.5 million and the aggregate of the service and interest
cost components of the net retiree cost by $610 thousand.
II-162
<PAGE>
NOTES (continued)
Gulf Power Company 1995 Annual Report
Components of the plans' net costs are shown below:
Pension
------------------------------------
1995 1994 1993
------------------------------------
(in thousands)
Benefits earned during
the year $ 3,867 $ 3,775 $ 3,710
Interest cost on projected
benefit obligation 8,042 7,484 7,319
Actual (return) loss on
plan assets (33,853) 3,721 (20,672)
Net amortization
and deferral 19,619 (17,054) 8,853
- - ------------------------------------------------------------------
Net pension cost (income) $ (2,325) $(2,074) $ (790)
==================================================================
Of the above net pension amounts, pension income of $1.8 million in 1995,
$1.5 million in 1994, and $601 thousand in 1993 were recorded in operating
expenses, and the remainder was recorded in construction and other accounts.
Postretirement Benefits
--------------------------------
1995 1994 1993
--------------------------------
(in thousands)
Benefits earned during the year $1,259 $1,362 $1,166
Interest cost on accumulated
benefit obligation 2,520 2,535 2,339
Amortization of transition
obligation 853 854 854
Actual (return) loss on plan (1,268) 129 (731)
assets
Net amortization and deferral 742 (591) 310
- - -------------------------------------------------------------------
Net postretirement cost $4,106 $4,289 $3,938
===================================================================
Of the above net postretirement costs recorded, $3.1 million in 1995 and 1994
and $3.0 million in 1993 were charged to operating expenses, and the remainder
was recorded in construction and other accounts.
Work Force Reduction Programs
The Company implemented a voluntary work force reduction program in the fourth
quarter of 1995 and recorded $7 million in December for the total cost related
to the program. These costs are expected to be recovered through future savings
over approximately two years. The Company has also incurred its pro rata share
for the costs of affiliated companies' programs. The costs related to these
programs were $1 million, $1.3 million, and $109 thousand for the years 1995,
1994, and 1993, respectively.
3. LITIGATION AND REGULATORY MATTERS
FERC Reviews Equity Returns
In May 1991, the FERC ordered that hearings be conducted concerning the
reasonableness of the operating companies' wholesale rate schedules and
contracts that have a return on common equity of 13.75 percent or greater. The
contracts that could be affected by the hearings include substantially all of
the transmission, unit power, long-term power and other similar contracts. Any
change in the rate of return on common equity that may require refunds as a
result of this proceeding would be substantially for the period beginning in
July 1991 and ending in October 1992. In August 1992, a FERC administrative law
judge issued an opinion that changes in rate schedules and contracts were not
necessary and that the FERC staff failed to show how any changes were in the
public interest. The FERC staff has filed exceptions to the administrative law
judge's opinion, and the matter remains pending before the FERC.
In August 1994, the FERC instituted another proceeding based on substantially
the same issues as in the 1991 proceeding. The second period under review for
possible refunds was substantially from October 1994 through December 1995. In
November 1995, a FERC administrative law judge issued an opinion that the FERC
staff failed to meet its burden of proof, and therefore, no change in the equity
return was necessary. The FERC staff has filed exceptions to the administrative
law judge's opinion, and the matter remains pending before the FERC.
If the rates of return on common equity recommended by the FERC staff were
applied to all of the schedules and contracts involved in both proceedings and
refunds were ordered, the amount of refunds could range up to approximately $120
million for The Southern Company, including approximately $8 million for the
Company at December 31, 1995. However, management believes that rates are not
excessive and that refunds are not justified.
II-163
<PAGE>
NOTES (continued)
Gulf Power Company 1995 Annual Report
FPSC Review of Earnings
As a result of an investigation of Gulf's 1995 earnings by the FPSC, Gulf
presented a 1995 earnings proposal, which required deferring any jurisdictional
revenues contributing to annual earnings in excess of a 12.75%
jurisdictional-adjusted return on equity. The proposal was approved by the FPSC
in August 1995. Gulf was to petition the FPSC to determine the disposition of
any deferred revenues by April 1996. Based on 1995 actual results, no revenues
were deferred.
Environmental Cost Recovery
In April 1993, the Florida Legislature adopted legislation for an Environmental
Cost Recovery Clause (ECRC), which allows a utility to petition the FPSC for
recovery of all prudent environmental compliance costs that are not being
recovered through base rates or any other recovery mechanism. Such environmental
costs include operation and maintenance expense, emission allowance expense,
depreciation, and a return on invested capital.
On January 12, 1994, the FPSC approved the Company's initial petition under
the ECRC for recovery of environmental costs that were projected to be incurred
from July 1993 through September 1994. Since this initial period, recovery under
the ECRC has been determined semi-annually and includes a true-up of the prior
period and a projection of the ensuing six month period. During 1995 and 1994,
the Company recorded ECRC revenues of $11.8 million and $7.2 million,
respectively.
At December 31, 1995, the Company's liability for the estimated costs of
environmental remediation projects for known sites was $5.8 million. These
estimated costs are expected to be expended during the period 1996 to 1999.
These projects have been approved by the FPSC for recovery through the ECRC
discussed above. Therefore, the Company recorded $2.0 million in current assets
and $3.8 million in deferred charges representing the future recoverability of
these costs.
4. CONSTRUCTION PROGRAM
The Company is engaged in a continuous construction program, the cost of which
is currently estimated to total $71 million in 1996, $67 million in 1997, and
$71 million in 1998. The construction program is subject to periodic review and
revision, and actual construction costs may vary from the above estimates
because of numerous factors. These factors include changes in business
conditions; revised load growth estimates; changes in environmental regulations;
increasing costs of labor, equipment and materials; and cost of capital. At
December 31, 1995, significant purchase commitments were outstanding in
connection with the construction program. The Company does not have any new
baseload generating plants under construction. However, significant construction
will continue related to transmission and distribution facilities and the
upgrading and extension of the useful lives of generating plants.
See Management's Discussion and Analysis under "Environmental Matters" for
information on the impact of the Clean Air Act Amendments of 1990 and other
environmental matters.
5. FINANCING AND COMMITMENTS
General
Current projections indicate that funds required for construction and other
purposes, including compliance with environmental regulations, will be derived
primarily from internal sources. Requirements not met from internal sources will
be financed from the sale of additional first mortgage bonds, pollution control
bonds, and preferred stock; bank notes; and capital contributions from The
Southern Company. In addition, the Company may issue additional long-term debt
and preferred stock primarily for the purposes of debt maturities and
redemptions of higher-cost securities. If the attractiveness of current
short-term interest rates continues, the Company may maintain a higher level of
short-term indebtedness than has historically been true.
Bank Credit Arrangements
At December 31, 1995, the Company had $20 million in revolving credit lines that
expire May 31, 1998, $5 million in revolving credit lines subject to renewal
June 1, 1997, and $21.5 million of lines of credit with banks subject to renewal
June 1 of each year, of which $25 million remained unused. In connection with
these credit lines, the Company has agreed to pay commitment fees and/or to
II-164
<PAGE>
NOTES (continued)
Gulf Power Company 1995 Annual Report
maintain compensating balances with the banks. The compensating balances, which
represent substantially all of the cash of the Company except for daily working
funds and like items, are not legally restricted from withdrawal. In addition,
the Company has bid-loan facilities with fourteen major money center banks that
total $250 million, of which $37 million was committed at December 31, 1995.
Assets Subject to Lien
The Company's mortgage, which secures the first mortgage bonds issued by the
Company, constitutes a direct first lien on substantially all of the Company's
fixed property and franchises.
Fuel Commitments
To supply a portion of the fuel requirements of its generating plants, the
Company has entered into long-term commitments for the procurement of fuel. In
most cases, these contracts contain provisions for price escalations, minimum
purchase levels, and other financial commitments. Total estimated long-term
obligations at December 31, 1995, were as follows:
Year Fuel
------- ---------------
(in millions)
1996 $ 125
1997 126
1998 95
1999 86
2000 80
2001 - 2007 557
-------------------------------------------------------
Total commitments $1,069
=======================================================
To take advantage of lower-cost coal supplies, agreements were reached in
1986 to terminate two long-term contracts for the supply of coal to Plant
Daniel, which is jointly owned by the Company and Mississippi Power, an
operating affiliate. The Company's portion of this payment was $60 million. This
amount is being amortized to expense on a per ton basis over a nine-year period.
The remaining unamortized amount was $1.5 million at December 31, 1995.
In 1988, the Company made an advance payment of $60 million to another coal
supplier under an arrangement to lower the cost of future coal purchased under
an existing contract. This amount is being amortized to expense on a per ton
basis over a ten-year period. The remaining unamortized amount was $23 million
at December 31, 1995.
In 1993, the Company made a payment of $16.4 million to a coal supplier under
an arrangement to suspend the purchase of coal under an existing contract for
one year. This amount was amortized to expense on a per ton basis during 1993,
1994, and the first quarter of 1995.
In December 1995, the Company made a payment of $22 million to a coal
supplier under an arrangement to lower the cost of future coal and/or to suspend
the purchase of coal under an existing contract for 25 months. This amount is to
be amortized to expense on a per ton basis during 1996, 1997, and the first
quarter of 1998.
The amortization expense of these contract buyouts and renegotiations is
being recovered through the fuel cost recovery clause discussed under "Revenues
and Regulatory Cost Recovery Clauses" in Note 1.
Lease Agreements
In 1989, the Company and Mississippi Power jointly entered into a twenty-two
year operating lease agreement for the use of 495 aluminum railcars. In 1994, a
second lease agreement for the use of 250 additional aluminum railcars was
entered into for twenty-two years. Both of these leases are for the
transportation of coal to Plant Daniel. The Company, as a joint owner of Plant
Daniel, is responsible for one half of the lease costs. The lease costs are
charged to fuel inventory and are allocated to fuel expense as the fuel is used.
The Company's share of the lease costs charged to fuel inventory was $1.7
million in 1995 and $1.2 million in 1994 and 1993. The Company's annual lease
payments for 1996 through 2000 will be approximately $1.7 million and after
2000, lease payments total approximately $22.4 million. The Company has the
option after three years from the date of the original contract on the second
lease agreement to purchase the railcars at the greater of the termination value
or the fair market value. Additionally, at the end of each lease term, the
Company has the option to renew the lease.
II-165
<PAGE>
NOTES (continued)
Gulf Power Company 1995 Annual Report
6. JOINT OWNERSHIP AGREEMENTS
The Company and Mississippi Power jointly own Plant Daniel, a steam-electric
generating plant, located in Jackson County, Mississippi. In accordance with an
operating agreement, Mississippi Power acts as the Company's agent with respect
to the construction, operation, and maintenance of the plant.
The Company and Georgia Power, an operating affiliate, jointly own Plant
Scherer Unit No. 3. Plant Scherer is a steam-electric generating plant located
near Forsyth, Georgia. In accordance with an operating agreement, Georgia Power
acts as the Company's agent with respect to the construction, operation, and
maintenance of the unit.
The Company's pro rata share of expenses related to both plants is included
in the corresponding operating expense accounts in the Statements of Income.
At December 31, 1995, the Company's percentage ownership and its investment
in these jointly owned facilities were as follows:
Plant Scherer Plant
Unit No. 3 Daniel
(coal-fired) (coal-fired)
------------------------------
(in thousands)
Plant In Service $185,755(1) $222,515
Accumulated Depreciation $49,982 $97,033
Construction Work in Progress $288 $683
Nameplate Capacity (2)
(megawatts) 205 500
Ownership 25% 50%
- - -----------------------------------------------------------------
(1) Includes net plant acquisition adjustment.
(2) Total megawatt nameplate capacity:
Plant Scherer Unit No. 3: 818
Plant Daniel: 1,000
7. LONG-TERM POWER SALES AGREEMENTS
The Company and the other operating affiliates have long-term contractual
agreements for the sale of capacity and energy to certain non-affiliated
utilities located outside the system's service area. The agreements for non-firm
capacity expired in 1994. The unit power sales agreements, expiring at various
dates discussed below, are firm and pertain to capacity related to specific
generating units. Because the energy is generally sold at cost under these
agreements, revenues from capacity sales primarily affect profitability. The
Company's capacity revenues have been as follows:
Other
Unit Long-
Year Power Term Total
- - ---------- ------------------------------------
(in thousands)
1995 $25,870 $ - $25,870
1994 29,653 1,273 30,926
1993 31,162 2,643 33,805
- - ----------------------------------------------------------
Unit power from specific generating plants of The Southern Company is
currently being sold to Florida Power Corporation (FPC), Florida Power & Light
Company (FP&L), Jacksonville Electric Authority (JEA), and the city of
Tallahassee, Florida. Under these agreements, 210 megawatts of net dependable
capacity were sold by the Company during 1995, and sales will remain at that
level until the expiration of the contracts in 2010, unless reduced by FPC,
FP&L and JEA after 1999.
Capacity and energy sales to FP&L, the Company's largest single customer,
provided revenues of $25.4 million in 1995, $29.3 million in 1994, and $39.5
million in 1993, or 4.1 percent, 5.1 percent, and 6.8 percent of operating
revenues, respectively.
II-166
<PAGE>
NOTES (continued)
Gulf Power Company 1995 Annual Report
8. INCOME TAXES
Effective January 1, 1993, the Company adopted FASB Statement No. 109,
Accounting for Income Taxes. The adoption resulted in the recording of
additional deferred income taxes and related regulatory assets and liabilities.
At December 31, 1995, the tax-related regulatory assets to be recovered from
customers were $29.1 million. These assets are attributable to tax benefits
flowed through to customers in prior years and to taxes applicable to
capitalized AFUDC. At December 31, 1995, the tax-related regulatory liabilities
to be refunded to customers were $67.5 million. These liabilities are
attributable to deferred taxes previously recognized at rates higher than
current enacted tax law and to unamortized investment tax credits.
At December 31, 1995, the Company's current federal and state income taxes
accrued, including the current portion of deferred income taxes, were equal to a
debit balance of $4.2 million as a result of the early settlement of taxes owed.
This amount was reclassified to current assets to reflect the tax prepayment and
will be used to satisfy taxes accrued during 1996.
Details of the federal and state income tax provisions are as follows:
1995 1994 1993
----------------------------------
(in thousands)
Total provision for
income taxes:
Federal--
Currently payable $29,018 $34,941 $24,354
Deferred--current year 23,172 18,556 26,396
--reversal of
prior years (23,116) (24,787) (22,102)
- - ------------------------------------------------------------------
29,074 28,710 28,648
- - ------------------------------------------------------------------
State--
Currently payable 4,778 5,907 3,950
Deferred--current year 3,313 2,549 3,838
--reversal of
prior years (2,979) (3,304) (2,785)
- - ------------------------------------------------------------------
5,112 5,152 5,003
- - ------------------------------------------------------------------
Total 34,186 33,862 33,651
Less income taxes charged
(credited) to other income 121 (95) 921
- - ------------------------------------------------------------------
Federal and state income
taxes charged
to operations $34,065 $33,957 $32,730
==================================================================
The tax effects of temporary differences between the carrying amounts of
assets and liabilities in the financial statements and their respective tax
bases, which give rise to deferred tax assets and liabilities, are as follows:
1995 1994
-----------------------
(in thousands)
Deferred tax liabilities:
Accelerated depreciation $146,926 $146,686
Property basis differences 19,976 18,468
Coal contract buyouts 3,838 6,896
Property insurance 3,039 -
Other 10,573 11,846
- - -------------------------------------------------------------------
Total 184,352 183,896
- - -------------------------------------------------------------------
Deferred tax assets:
Federal effect of state deferred taxes 10,212 9,732
Postretirement benefits 5,494 4,383
Property insurance - 5,200
Other 6,313 7,566
- - -------------------------------------------------------------------
Total 22,019 26,881
- - -------------------------------------------------------------------
Net deferred tax liabilities 162,333 157,015
Less current portion, net (12) 5,334
- - -------------------------------------------------------------------
Accumulated deferred income
taxes in the Balance Sheets $162,345 $151,681
===================================================================
Deferred investment tax credits are amortized over the life of the related
property with such amortization normally applied as a credit to reduce
depreciation in the Statements of Income. Credits amortized in this manner
amounted to $2.3 million in 1995, 1994 and 1993. At December 31, 1995, all
investment tax credits available to reduce federal income taxes payable had been
utilized.
A reconciliation of the federal statutory income tax rate to the effective
income tax rate is as follows:
1995 1994 1993
-----------------------------
Federal statutory rate 35% 35% 35%
State income tax,
net of federal deduction 4 4 3
Non-deductible book
depreciation 1 1 1
Difference in prior years'
deferred and current tax rate (3) (2) (2)
Other (2) (2) (1)
- - ---------------------------------------------------------------
Effective income tax rate 35% 36% 36%
===============================================================
The Company and the other subsidiaries of The Southern Company file a
consolidated federal tax return. Under a joint consolidated income tax
agreement, each subsidiary's current and deferred tax expense is computed
II-167
<PAGE>
NOTES (continued)
Gulf Power Company 1995 Annual Report
on a stand-alone basis. Tax benefits from losses of the parent company are
allocated to each subsidiary based on the ratio of taxable income to total
consolidated taxable income.
9. POLLUTION CONTROL OBLIGATIONS AND OTHER LONG-TERM DEBT
Details of pollution control bonds and other long-term debt at December 31 are
as follows:
1995 1994
--------------------------
(in thousands)
Obligations incurred in
connection with the sale by
public authorities of
tax-exempt pollution control
revenue bonds:
Collateralized
6% due 2006* $ 12,075 $ 12,200
8.25% due 2017 32,000 32,000
7.125% due 2021 21,200 21,200
6.75% due 2022 8,930 8,930
5.70% due 2023 7,875 7,875
5.80% due 2023 32,550 32,550
6.20% due 2023 13,000 13,000
6.30% due 2024 22,000 22,000
Variable Rate
Remarketable daily 20,000 20,000
- - ---------------------------------------------------------------
$169,630 $169,755
- - ---------------------------------------------------------------
Notes payable:
5.39% due 1995 - 4,500
5.72% due 1995 - 4,500
4.69% due 1996 25,000 25,000
6.44% due 1994-1998 12,074 16,388
- - ---------------------------------------------------------------
37,074 50,388
- - ---------------------------------------------------------------
Total $206,704 $220,143
===============================================================
* Sinking fund requirement applicable to the 6 percent pollution control
bonds is $200 thousand for 1996 with increasing increments periodically
thereafter through 2005, with the remaining balance due in 2006.
Pollution control obligations represent installment purchases of pollution
control facilities financed by funds derived from sales by public authorities of
revenue bonds. With respect to the collateralized pollution control revenue
bonds, the Company has authenticated and delivered to trustees a like principal
amount of first mortgage bonds as security for obligations under collateralized
installment agreements. The principal and interest on the first mortgage bonds
will be payable only in the event of default under the agreements.
The 5.39 percent and 5.72 percent notes payable were the Company's portion of
notes payable issued in connection with the termination of Plant Daniel coal
contracts (see Note 5 under "Fuel Commitments" for further information). The
estimated annual maturities of the notes payable through 2000 are as follows:
$29.6 million in 1996, $4.9 million in 1997, $2.6 million in 1998, and none in
1999 and 2000.
10. LONG-TERM DEBT DUE WITHIN ONE YEAR
A summary of the improvement fund requirement and scheduled maturities and
redemptions of long-term debt due within one year at December 31 is as follows:
1995 1994
----------------------
(in thousands)
Bond improvement fund requirement $ 1,750 $ 1,750
Less: Portion to be satisfied by cash
or certifying property
additions - 1,750
- - ---------------------------------------------------------------
Cash sinking fund requirement 1,750 -
Current portion of notes payable 29,598 13,314
(Note 9)
Pollution control bond maturity 200 125
(Note 9)
- - ---------------------------------------------------------------
Total $31,548 $13,439
===============================================================
The first mortgage bond improvement (sinking) fund requirement amounts to 1
percent of each outstanding series of bonds authenticated under the indenture
prior to January 1 of each year, other than those issued to collateralize
pollution control obligations. The requirement may be satisfied by depositing
cash, reacquiring bonds, or by pledging additional property equal to 1 and 2/3
times the requirement.
II-168
<PAGE>
NOTES (continued)
Gulf Power Company 1995 Annual Report
11. COMMON STOCK DIVIDEND RESTRICTIONS
The Company's first mortgage bond indenture contains various common stock
dividend restrictions which remain in effect as long as the bonds are
outstanding. At December 31, 1995, retained earnings of $101 million were
restricted against the payment of cash dividends on common stock under the terms
of the mortgage indenture.
The Company's charter limits cash dividends on common stock to 50 percent of
net income available for such stock during a prior period of 12 months if the
capitalization ratio is below 20 percent and to 75 percent of such net income if
such ratio is 20 percent or more but less than 25 percent. The capitalization
ratio is defined as the ratio of common stock equity to total capitalization,
including retained earnings, adjusted to reflect the payment of the proposed
dividend. At December 31, 1995, the ratio was 48.7 percent.
12. QUARTERLY FINANCIAL DATA (Unaudited)
Summarized quarterly financial data for 1995 and 1994 are as follows:
Net Income
After Dividends
Operating Operating on Preferred
Quarter Ended Revenues Income Stock
- - ------------------------------------------------------------------
(in thousands)
March 31, 1995 $140,918 $19,503 $10,880
June 30, 1995 153,057 23,390 14,096
Sept. 30, 1995 184,251 35,187 26,588
Dec. 31, 1995 140,851 13,082 5,590
March 31, 1994 $138,088 $19,154 $10,117
June 30, 1994 146,769 19,957 8,886
Sept. 30, 1994 162,143 31,123 21,831
Dec. 31, 1994 131,813 21,979 14,395
- - ------------------------------------------------------------------
The Company's business is influenced by seasonal weather conditions and the
timing of rate changes, among other factors.
II-169
<PAGE>
<TABLE>
<CAPTION>
SELECTED FINANCIAL AND OPERATING DATA
Gulf Power Company 1995 Annual Report
<S> <C> <C> <C>
=========================================================================================================
1995 1994 1993
- - ---------------------------------------------------------------------------------------------------------
Operating Revenues (in thousands) $619,077 $578,813 $583,142
Net Income after Dividends
on Preferred Stock (in thousands) $57,154 $55,229 $54,311
Cash Dividends on Common Stock (in thousands) $46,400 $44,000 $41,800
Return on Average Common Equity (percent) 13.27 13.15 13.29
Total Assets (in thousands) $1,341,859 $1,315,542 $1,307,809
Gross Property Additions (in thousands) $63,113 $78,869 $78,562
- - ---------------------------------------------------------------------------------------------------------
Capitalization (in thousands):
Common stock equity $436,242 $425,472 $414,196
Preferred stock 89,602 89,602 89,602
Preferred stock subject to mandatory redemption - - 1,000
Long-term debt 323,376 356,393 369,259
- - ---------------------------------------------------------------------------------------------------------
Total (excluding amounts due within one year) $849,220 $871,467 $874,057
- - ---------------------------------------------------------------------------------------------------------
Capitalization Ratios (percent):
Common stock equity 51.4 48.8 47.4
Preferred stock 10.5 10.3 10.4
Long-term debt 38.1 40.9 42.2
- - ---------------------------------------------------------------------------------------------------------
Total (excluding amounts due within one year) 100.0 100.0 100.0
=========================================================================================================
First Mortgage Bonds (in thousands):
Issued - - 75,000
Retired 1,750 48,856 88,809
Preferred Stock (in thousands):
Issued - - 35,000
Retired 1,000 1,000 21,060
- - ---------------------------------------------------------------------------------------------------------
Security Ratings:
First Mortgage Bonds -
Moody's A1 A2 A2
Standard and Poor's A+ A A
Duff & Phelps A+ A+ A+
Preferred Stock -
Moody's a2 a2 a2
Standard and Poor's A A- A-
Duff & Phelps A A A
- - ---------------------------------------------------------------------------------------------------------
Customers (year-end):
Residential 283,421 280,859 274,194
Commercial 41,281 40,398 39,253
Industrial 278 283 274
Other 134 106 86
- - ---------------------------------------------------------------------------------------------------------
Total 325,114 321,646 313,807
=========================================================================================================
Employees (year-end) 1,501 1,540 1,565
</TABLE>
II-170
<PAGE>
<TABLE>
<CAPTION>
SELECTED FINANCIAL AND OPERATING DATA
Gulf Power Company 1995 Annual Report
<S> <C> <C> <C>
=============================================================================================================
1992 1991 1990
- - ------------------------------------------------------------------------------------------------------------
Operating Revenues (in thousands) $570,902 $565,207 $567,825
Net Income after Dividends
on Preferred Stock (in thousands) $54,090 $57,796 $38,714
Cash Dividends on Common Stock (in thousands) $39,900 $38,000 $37,000
Return on Average Common Equity (percent) 13.62 15.17 10.51
Total Assets (in thousands) $1,062,699 $1,095,736 $1,084,579
Gross Property Additions (in thousands) $64,671 $64,323 $62,462
- - ------------------------------------------------------------------------------------------------------------
Capitalization (in thousands):
Common stock equity $403,190 $390,981 $371,185
Preferred stock 74,662 55,162 55,162
Preferred stock subject to mandatory redemption 2,000 7,500 9,250
Long-term debt 382,047 434,648 475,284
- - ------------------------------------------------------------------------------------------------------------
Total (excluding amounts due within one year) $861,899 $888,291 $910,881
- - ------------------------------------------------------------------------------------------------------------
Capitalization Ratios (percent):
Common stock equity 46.8 44.0 40.8
Preferred stock 8.9 7.1 7.1
Long-term debt 44.3 48.9 52.1
- - -------------------------------------------------------------------------------------------------------
Total (excluding amounts due within one year) 100.0 100.0 100.0
============================================================================================================
First Mortgage Bonds (in thousands):
Issued 25,000 50,000 -
Retired 117,693 32,807 6,455
Preferred Stock (in thousands):
Issued 29,500 - -
Retired 15,500 2,500 1,750
- - ------------------------------------------------------------------------------------------------------------
Security Ratings:
First Mortgage Bonds -
Moody's A2 A2 A2
Standard and Poor's A A A
Duff & Phelps A A A
Preferred Stock -
Moody's a2 a2 a2
Standard and Poor's A- A- A-
Duff & Phelps A- A- A-
- - ------------------------------------------------------------------------------------------------------------
Customers (year-end):
Residential 267,591 261,210 256,111
Commercial 37,105 34,685 34,019
Industrial 270 264 252
Other 74 72 67
- - ------------------------------------------------------------------------------------------------------------
Total 305,040 296,231 290,449
============================================================================================================
Employees (year-end) 1,613 1,598 1,615
</TABLE>
II-171A
<PAGE>
<TABLE>
<CAPTION>
SELECTED FINANCIAL AND OPERATING DATA
Gulf Power Company 1995 Annual Report
<S> <C> <C> <C>
==============================================================================================================
1989 1988 1987
- - --------------------------------------------------------------------------------------------------------------
Operating Revenues (in thousands) $527,821 $550,827 $587,860
Net Income after Dividends
on Preferred Stock (in thousands) $37,361 $45,698 $42,217
Cash Dividends on Common Stock (in thousands) $37,200 $35,400 $34,200
Return on Average Common Equity (percent) 10.32 13.41 13.23
Total Assets (in thousands) $1,093,430 $1,097,225 $1,051,182
Gross Property Additions (in thousands) $70,726 $67,042 $97,511
- - --------------------------------------------------------------------------------------------------------------
Capitalization (in thousands):
Common stock equity $365,471 $358,310 $323,012
Preferred stock 55,162 55,162 55,162
Preferred stock subject to mandatory redemption 11,000 12,750 14,000
Long-term debt 484,608 497,069 474,640
- - --------------------------------------------------------------------------------------------------------------
Total (excluding amounts due within one year) $916,241 $923,291 $866,814
- - --------------------------------------------------------------------------------------------------------------
Capitalization Ratios (percent):
Common stock equity 39.9 38.8 37.2
Preferred stock 7.2 7.4 8.0
Long-term debt 52.9 53.8 54.8
- - --------------------------------------------------------------------------------------------------------------
Total (excluding amounts due within one year) 100.0 100.0 100.0
==============================================================================================================
First Mortgage Bonds (in thousands):
Issued - 35,000 -
Retired 9,344 9,369 -
Preferred Stock (in thousands):
Issued - - -
Retired 1,250 1,750 2,500
- - --------------------------------------------------------------------------------------------------------------
Security Ratings:
First Mortgage Bonds -
Moody's A1 A1 A1
Standard and Poor's A A A
Duff & Phelps AA- 4 4
Preferred Stock -
Moody's a1 a1 a1
Standard and Poor's A- A- A-
Duff & Phelps A+ 5 5
- - --------------------------------------------------------------------------------------------------------------
Customers (year-end):
Residential 251,341 246,450 241,138
Commercial 33,678 33,030 32,139
Industrial 240 206 206
Other 67 61 61
- - --------------------------------------------------------------------------------------------------------------
Total 285,326 279,747 273,544
==============================================================================================================
Employees (year-end) 1,614 1,601 1,603
</TABLE>
II-171B
<PAGE>
<TABLE>
<CAPTION>
SELECTED FINANCIAL AND OPERATING DATA
Gulf Power Company 1995 Annual Report
<S> <C> <C>
=======================================================================================
1986 1985
- - ---------------------------------------------------------------------------------------
Operating Revenues (in thousands) $542,919 $562,068
Net Income after Dividends
on Preferred Stock (in thousands) $46,421 $45,484
Cash Dividends on Common Stock (in thousands) $33,100 $30,800
Return on Average Common Equity (percent) 15.06 15.61
Total Assets (in thousands) $1,028,864 $921,635
Gross Property Additions (in thousands) $90,160 $92,541
- - ---------------------------------------------------------------------------------------
Capitalization (in thousands):
Common stock equity $314,995 $301,674
Preferred stock 55,162 55,162
Preferred stock subject to mandatory redemption 16,500 18,250
Long-term debt 482,869 410,917
- - ---------------------------------------------------------------------------------------
Total (excluding amounts due within one year) $869,526 $786,003
- - ---------------------------------------------------------------------------------------
Capitalization Ratios (percent):
Common stock equity 36.2 38.4
Preferred stock 8.3 9.3
Long-term debt 55.5 52.3
- - ---------------------------------------------------------------------------------------
Total (excluding amounts due within one year) 100.0 100.0
=======================================================================================
First Mortgage Bonds (in thousands):
Issued 50,000 -
Retired 46,640 2,860
Preferred Stock (in thousands):
Issued - -
Retired 750 750
- - ---------------------------------------------------------------------------------------
Security Ratings:
First Mortgage Bonds -
Moody's A1 A1
Standard and Poor's A+ A+
Duff & Phelps 4 4
Preferred Stock -
Moody's a1 a1
Standard and Poor's A A
Duff & Phelps 5 5
- - ---------------------------------------------------------------------------------------
Customers (year-end):
Residential 235,329 227,845
Commercial 31,142 29,603
Industrial 197 183
Other 62 62
- - ---------------------------------------------------------------------------------------
Total 266,730 257,693
=======================================================================================
Employees (year-end) 1,544 1,509
</TABLE>
II-171C
<PAGE>
<TABLE>
<CAPTION>
SELECTED FINANCIAL AND OPERATING DATA (continued)
Gulf Power Company 1995 Annual Report
<S> <C> <C> <C>
=========================================================================================================
1995 1994 1993
- - ---------------------------------------------------------------------------------------------------------
Operating Revenues (in thousands):
Residential $276,155 $252,598 $244,967
Commercial 159,260 146,394 137,308
Industrial 81,606 82,169 87,526
Other 1,993 1,955 1,882
- - ---------------------------------------------------------------------------------------------------------
Total retail 519,014 483,116 471,683
Sales for resale - non-affiliates 60,413 66,111 72,209
Sales for resale - affiliates 18,619 17,353 23,166
- - ---------------------------------------------------------------------------------------------------------
Total revenues from sales of electricity 598,046 566,580 567,058
Other revenues 21,031 12,233 16,084
- - ---------------------------------------------------------------------------------------------------------
Total $619,077 $578,813 $583,142
=========================================================================================================
Kilowatt-Hour Sales (in thousands):
Residential 4,014,142 3,751,932 3,712,980
Commercial 2,708,243 2,548,846 2,433,382
Industrial 1,794,754 1,847,114 2,029,936
Other 17,345 17,354 16,944
- - ---------------------------------------------------------------------------------------------------------
Total retail 8,534,484 8,165,246 8,193,242
Sales for resale - non-affiliates 1,396,474 1,418,977 1,460,105
Sales for resale - affiliates 759,341 874,050 1,029,787
- - ---------------------------------------------------------------------------------------------------------
Total 10,690,299 10,458,273 10,683,134
=========================================================================================================
Average Revenue Per Kilowatt-Hour (cents):
Residential 6.88 6.73 6.60
Commercial 5.88 5.74 5.64
Industrial 4.55 4.45 4.31
Total retail 6.08 5.92 5.76
Sales for resale 3.67 3.64 3.83
Total sales 5.59 5.42 5.31
Average Annual Kilowatt-Hour Use Per Residential Customer 14,148 13,486 13,671
Average Annual Revenue Per Residential Customer $973.35 $907.92 $901.96
Plant Nameplate Capacity Ratings (year-end) (megawatts) 2,174 2,174 2,174
Maximum Peak-Hour Demand (megawatts):
Winter 1,732 1,801 1,571
Summer 2,040 1,795 1,898
Annual Load Factor (percent) 53.0 56.7 54.5
Plant Availability - Fossil-Steam (percent) 84.0 92.2 88.9
- - ---------------------------------------------------------------------------------------------------------
Source of Energy Supply (percent):
Coal 86.8 87.2 84.5
Oil and gas 0.4 0.2 0.5
Purchased power -
From non-affiliates 4.0 2.8 1.5
From affiliates 8.8 9.8 13.5
- - ---------------------------------------------------------------------------------------------------------
Total 100.0 100.0 100.0
=========================================================================================================
Total Fuel Economy Data:
BTU per net kilowatt-hour generated 10,609 10,614 10,390
Cost of fuel per million BTU (cents) 196.62 189.55 197.37
Average cost of fuel per net kilowatt-hour generated (cents) 2.09 2.01 2.05
=========================================================================================================
</TABLE>
II-172
<PAGE>
<TABLE>
<CAPTION>
SELECTED FINANCIAL AND OPERATING DATA (continued)
Gulf Power Company 1995 Annual Report
<S> <C> <C> <C>
===============================================================================================================
1992 1991 1990
- - ---------------------------------------------------------------------------------------------------------------
Operating Revenues (in thousands):
Residential $235,296 $231,220 $217,843
Commercial 133,071 130,691 124,066
Industrial 91,320 92,300 91,041
Other 1,784 1,860 1,805
- - ---------------------------------------------------------------------------------------------------------------
Total retail 461,471 456,071 434,755
Sales for resale - non-affiliates 70,078 69,636 73,855
Sales for resale - affiliates 24,075 29,343 38,563
- - ---------------------------------------------------------------------------------------------------------------
Total revenues from sales of electricity 555,624 555,050 547,173
Other revenues 15,278 10,157 20,652
- - ---------------------------------------------------------------------------------------------------------------
Total $570,902 $565,207 $567,825
===============================================================================================================
Kilowatt-Hour Sales (in thousands):
Residential 3,596,515 3,455,100 3,360,838
Commercial 2,369,236 2,272,690 2,217,568
Industrial 2,179,435 2,117,408 2,177,872
Other 16,649 17,118 18,866
- - ---------------------------------------------------------------------------------------------------------------
Total retail 8,161,835 7,862,316 7,775,144
Sales for resale - non-affiliates 1,430,908 1,550,018 1,775,703
Sales for resale - affiliates 1,208,771 1,236,223 1,435,558
- - ---------------------------------------------------------------------------------------------------------------
Total 10,801,514 10,648,557 10,986,405
===============================================================================================================
Average Revenue Per Kilowatt-Hour (cents):
Residential 6.54 6.69 6.48
Commercial 5.62 5.75 5.59
Industrial 4.19 4.36 4.18
Total retail 5.65 5.80 5.59
Sales for resale 3.57 3.55 3.50
Total sales 5.14 5.21 4.98
Average Annual Kilowatt-Hour Use Per Residential Customer 13,553 13,320 13,173
Average Annual Revenue Per Residential Customer $886.66 $891.38 $853.86
Plant Nameplate Capacity Ratings (year-end) (megawatts) 2,174 2,174 2,174
Maximum Peak-Hour Demand (megawatts):
Winter 1,533 1,418 1,310
Summer 1,828 1,740 1,778
Annual Load Factor (percent) 55.0 57.0 55.2
Plant Availability - Fossil-Steam (percent) 91.2 92.2 89.2
- - ---------------------------------------------------------------------------------------------------------------
Source of Energy Supply (percent):
Coal 87.7 82.0 69.8
Oil and gas 0.1 0.1 0.5
Purchased power -
From non-affiliates 0.8 0.5 0.6
From affiliates 11.4 17.4 29.1
- - ---------------------------------------------------------------------------------------------------------------
Total 100.0 100.0 100.0
===============================================================================================================
Total Fuel Economy Data:
BTU per net kilowatt-hour generated 10,347 10,636 10,765
Cost of fuel per million BTU (cents) 200.30 203.60 206.06
Average cost of fuel per net kilowatt-hour generated (cents) 2.07 2.17 2.22
===============================================================================================================
</TABLE>
II-173A
<PAGE>
<TABLE>
<CAPTION>
SELECTED FINANCIAL AND OPERATING DATA (continued)
Gulf Power Company 1995 Annual Report
<S> <C> <C> <C>
================================================================================================================
1989 1988 1987
- - ----------------------------------------------------------------------------------------------------------------
Operating Revenues (in thousands):
Residential $203,781 $184,036 $199,701
Commercial 118,897 107,615 116,057
Industrial 84,671 72,634 80,295
Other 1,586 1,402 1,357
- - ----------------------------------------------------------------------------------------------------------------
Total retail 408,935 365,687 397,410
Sales for resale - non-affiliates 67,554 117,466 134,456
Sales for resale - affiliates 39,244 48,277 55,955
- - ----------------------------------------------------------------------------------------------------------------
Total revenues from sales of electricity 515,733 531,430 587,821
Other revenues 12,088 19,397 39
- - ----------------------------------------------------------------------------------------------------------------
Total $527,821 $550,827 $587,860
================================================================================================================
Kilowatt-Hour Sales (in thousands):
Residential 3,293,750 3,154,541 3,055,041
Commercial 2,169,497 2,088,598 1,986,332
Industrial 2,094,670 1,968,091 1,839,931
Other 17,209 16,257 15,241
- - ----------------------------------------------------------------------------------------------------------------
Total retail 7,575,126 7,227,487 6,896,545
Sales for resale - non-affiliates 1,640,355 1,911,759 2,138,390
Sales for resale - affiliates 1,461,036 2,326,238 2,689,487
- - ----------------------------------------------------------------------------------------------------------------
Total 10,676,517 11,465,484 11,724,422
================================================================================================================
Average Revenue Per Kilowatt-Hour (cents):
Residential 6.19 5.83 6.54
Commercial 5.48 5.15 5.84
Industrial 4.04 3.69 4.36
Total retail 5.40 5.06 5.76
Sales for resale 3.44 3.91 3.94
Total sales 4.83 4.64 5.01
Average Annual Kilowatt-Hour Use Per Residential Customer 13,173 12,883 12,763
Average Annual Revenue Per Residential Customer $815.00 $751.60 $834.31
Plant Nameplate Capacity Ratings (year-end) (megawatts) 2,174 2,174 2,174
Maximum Peak-Hour Demand (megawatts):
Winter 1,814 1,395 1,354
Summer 1,691 1,613 1,617
Annual Load Factor (percent) 52.6 56.5 54.4
Plant Availability - Fossil-Steam (percent) 89.1 88.2 92.8
- - ----------------------------------------------------------------------------------------------------------------
Source of Energy Supply (percent):
Coal 78.3 93.2 93.5
Oil and gas 0.2 0.4 0.4
Purchased power -
From non-affiliates 0.4 0.4 0.4
From affiliates 21.1 6.0 5.7
- - ----------------------------------------------------------------------------------------------------------------
Total 100.0 100.0 100.0
================================================================================================================
Total Fuel Economy Data:
BTU per net kilowatt-hour generated 10,621 10,461 10,512
Cost of fuel per million BTU (cents) 193.70 178.00 197.53
Average cost of fuel per net kilowatt-hour generated (cents) 2.06 1.86 2.08
================================================================================================================
</TABLE>
II-173B
<PAGE>
<TABLE>
<CAPTION>
SELECTED FINANCIAL AND OPERATING DATA (continued)
Gulf Power Company 1995 Annual Report
<S> <C> <C>
===========================================================================================
1986 1985
- - ------------------------------------------------------------------------------------------
Operating Revenues (in thousands):
Residential $200,725 $186,415
Commercial 116,253 109,631
Industrial 79,873 81,621
Other 1,343 1,346
- - ------------------------------------------------------------------------------------------
Total retail 398,194 379,013
Sales for resale - non-affiliates 106,892 126,789
Sales for resale - affiliates 27,113 43,844
- - ------------------------------------------------------------------------------------------
Total revenues from sales of electricity 532,199 549,646
Other revenues 10,720 12,422
- - ------------------------------------------------------------------------------------------
Total $542,919 $562,068
==========================================================================================
Kilowatt-Hour Sales (in thousands):
Residential 2,963,502 2,736,432
Commercial 1,913,139 1,777,418
Industrial 1,745,074 1,770,587
Other 14,903 14,702
- - ------------------------------------------------------------------------------------------
Total retail 6,636,618 6,299,139
Sales for resale - non-affiliates 1,609,146 2,388,591
Sales for resale - affiliates 1,078,500 1,562,452
- - ------------------------------------------------------------------------------------------
Total 9,324,264 10,250,182
==========================================================================================
Average Revenue Per Kilowatt-Hour (cents):
Residential 6.77 6.81
Commercial 6.08 6.17
Industrial 4.58 4.61
Total retail 6.00 6.02
Sales for resale 4.99 4.32
Total sales 5.71 5.36
Average Annual Kilowatt-Hour Use Per Residential Customer 12,729 12,221
Average Annual Revenue Per Residential Customer $862.16 $832.55
Plant Nameplate Capacity Ratings (year-end) (megawatts) 1,969 1,969
Maximum Peak-Hour Demand (megawatts):
Winter 1,406 1,517
Summer 1,678 1,448
Annual Load Factor (percent) 50.5 53.4
Plant Availability - Fossil-Steam (percent) 90.5 84.8
- - ------------------------------------------------------------------------------------------
Source of Energy Supply (percent):
Coal 85.8 79.7
Oil and gas 0.5 0.2
Purchased power -
From non-affiliates 1.9 0.4
From affiliates 11.8 19.7
- - ------------------------------------------------------------------------------------------
Total 100.0 100.0
==========================================================================================
Total Fuel Economy Data:
BTU per net kilowatt-hour generated 10,639 10,609
Cost of fuel per million BTU (cents) 239.26 254.53
Average cost of fuel per net kilowatt-hour generated (cents) 2.55 2.70
==========================================================================================
</TABLE>
II-173C
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF INCOME
Gulf Power Company
==============================================================================================================================
For the Years Ended December 31, 1995 1994 1993
- - ------------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
Operating Revenues:
Revenues $ 600,458 $ 561,460 $ 559,976
Revenues from affiliates 18,619 17,353 23,166
- - ------------------------------------------------------------------------------------------------------------------------------
Total operating revenues 619,077 578,813 583,142
- - ------------------------------------------------------------------------------------------------------------------------------
Operating Expenses:
Operation --
Fuel 185,274 161,168 170,485
Purchased power from non-affiliates 8,594 6,761 4,386
Purchased power from affiliates 29,966 25,819 32,273
Proceeds from settlement of disputed contracts - - -
Other 113,397 113,879 109,164
Maintenance 51,917 46,700 46,004
Depreciation and amortization 55,104 56,615 55,309
Taxes other than income taxes 49,598 41,701 40,204
Federal and state income taxes 34,065 33,957 32,730
- - ------------------------------------------------------------------------------------------------------------------------------
Total operating expenses 527,915 486,600 490,555
- - ------------------------------------------------------------------------------------------------------------------------------
Operating Income 91,162 92,213 92,587
Other Income (Expense):
Allowance for equity funds used during construction 36 450 512
Interest income 2,877 1,429 1,328
Other, net (1,261) (780) (1,238)
Gain on sale of investment securities - - 3,820
Income taxes applicable to other income (121) 95 (921)
- - ------------------------------------------------------------------------------------------------------------------------------
Income Before Interest Charges 92,693 93,407 96,088
- - ------------------------------------------------------------------------------------------------------------------------------
Interest Charges:
Interest on long-term debt 23,294 27,124 31,344
Allowance for debt funds used during construction (187) (656) (454)
Interest on notes payable 2,931 1,509 870
Amortization of debt discount, premium, and expense, net 2,014 1,834 1,412
Other interest charges 1,674 2,442 2,877
- - ------------------------------------------------------------------------------------------------------------------------------
Net interest charges 29,726 32,253 36,049
- - ------------------------------------------------------------------------------------------------------------------------------
Net Income 62,967 61,154 60,039
Dividends on Preferred Stock 5,813 5,925 5,728
- - ------------------------------------------------------------------------------------------------------------------------------
Net Income After Dividends on Preferred Stock $ 57,154 $ 55,229 $ 54,311
==============================================================================================================================
</TABLE>
II-174
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF INCOME
Gulf Power Company
==============================================================================================================================
For the Years Ended December 31, 1992 1991 1990
- - ------------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
Operating Revenues:
Revenues $ 546,827 $ 535,864 $ 529,262
Revenues from affiliates 24,075 29,343 38,563
- - ------------------------------------------------------------------------------------------------------------------------------
Total operating revenues 570,902 565,207 567,825
- - ------------------------------------------------------------------------------------------------------------------------------
Operating Expenses:
Operation --
Fuel 182,754 176,038 156,712
Purchased power from non-affiliates 1,394 896 1,427
Purchased power from affiliates 26,788 32,579 67,729
Proceeds from settlement of disputed contracts (920) (20,385) -
Other 98,230 94,411 90,045
Maintenance 41,947 45,468 45,491
Depreciation and amortization 53,758 52,195 50,899
Taxes other than income taxes 37,898 42,359 39,110
Federal and state income taxes 32,078 33,893 24,780
- - ------------------------------------------------------------------------------------------------------------------------------
Total operating expenses 473,927 457,454 476,193
- - ------------------------------------------------------------------------------------------------------------------------------
Operating Income 96,975 107,753 91,632
Other Income (Expense):
Allowance for equity funds used during construction 14 54 -
Interest income 2,733 2,427 4,508
Other, net (1,487) (3,484) (6,360)
Gain on sale of investment securities - - -
Income taxes applicable to other income 187 1,104 1,303
- - ------------------------------------------------------------------------------------------------------------------------------
Income Before Interest Charges 98,422 107,854 91,083
- - ------------------------------------------------------------------------------------------------------------------------------
Interest Charges:
Interest on long-term debt 35,792 41,665 43,215
Allowance for debt funds used during construction (46) (95) 1
Interest on notes payable 1,041 280 693
Amortization of debt discount, premium, and expense, net 1,032 699 603
Other interest charges 1,410 2,272 2,422
- - ------------------------------------------------------------------------------------------------------------------------------
Net interest charges 39,229 44,821 46,934
- - ------------------------------------------------------------------------------------------------------------------------------
Net Income 59,193 63,033 44,149
Dividends on Preferred Stock 5,103 5,237 5,435
- - ------------------------------------------------------------------------------------------------------------------------------
Net Income After Dividends on Preferred Stock $ 54,090 $ 57,796 $ 38,714
==============================================================================================================================
</TABLE>
II-175A
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF INCOME
Gulf Power Company
==============================================================================================================================
For the Years Ended December 31, 1989 1988 1987
- - ------------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
Operating Revenues:
Revenues $ 488,577 $ 502,550 $ 531,905
Revenues from affiliates 39,244 48,277 55,955
- - ------------------------------------------------------------------------------------------------------------------------------
Total operating revenues 527,821 550,827 587,860
- - ------------------------------------------------------------------------------------------------------------------------------
Operating Expenses:
Operation --
Fuel 158,858 191,687 227,233
Purchased power from non-affiliates 1,251 1,468 1,792
Purchased power from affiliates 48,972 27,267 28,326
Proceeds from settlement of disputed contracts - - -
Other 82,231 93,028 100,032
Maintenance 44,295 41,919 38,748
Depreciation and amortization 48,760 47,530 44,619
Taxes other than income taxes 30,718 27,087 26,246
Federal and state income taxes 23,621 26,239 31,703
- - ------------------------------------------------------------------------------------------------------------------------------
Total operating expenses 438,706 456,225 498,699
- - ------------------------------------------------------------------------------------------------------------------------------
Operating Income 89,115 94,602 89,161
Other Income (Expense):
Allowance for equity funds used during construction (446) 457 1,013
Interest income 3,271 2,858 4,507
Other, net (3,800) (3,491) (1,207)
Gain on sale of investment securities - - -
Income taxes applicable to other income 779 1,001 (642)
- - ------------------------------------------------------------------------------------------------------------------------------
Income Before Interest Charges 88,919 95,427 92,832
- - ------------------------------------------------------------------------------------------------------------------------------
Interest Charges:
Interest on long-term debt 43,265 42,538 43,689
Allowance for debt funds used during construction 242 (808) (1,004)
Interest on notes payable 180 182 -
Amortization of debt discount, premium, and expense, net 613 600 555
Other interest charges 1,636 1,456 1,350
- - ------------------------------------------------------------------------------------------------------------------------------
Net interest charges 45,936 43,968 44,590
- - ------------------------------------------------------------------------------------------------------------------------------
Net Income 42,983 51,459 48,242
Dividends on Preferred Stock 5,622 5,761 6,025
- - ------------------------------------------------------------------------------------------------------------------------------
Net Income After Dividends on Preferred Stock $ 37,361 $ 45,698 $ 42,217
==============================================================================================================================
</TABLE>
II-175B
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF INCOME
Gulf Power Company
=============================================================================================================
For the Years Ended December 31, 1986 1985
- - -------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C>
Operating Revenues:
Revenues $ 515,806 $ 518,224
Revenues from affiliates 27,113 43,844
- - -------------------------------------------------------------------------------------------------------------
Total operating revenues 542,919 562,068
- - -------------------------------------------------------------------------------------------------------------
Operating Expenses:
Operation --
Fuel 215,262 230,944
Purchased power from non-affiliates 4,533 1,638
Purchased power from affiliates 37,172 55,119
Proceeds from settlement of disputed contracts - -
Other 70,117 59,851
Maintenance 35,251 35,654
Depreciation and amortization 39,386 37,775
Taxes other than income taxes 24,854 22,886
Federal and state income taxes 39,948 40,061
- - -------------------------------------------------------------------------------------------------------------
Total operating expenses 466,523 483,928
- - -------------------------------------------------------------------------------------------------------------
Operating Income 76,396 78,140
Other Income (Expense):
Allowance for equity funds used during construction 7,809 6,893
Interest income 2,445 3,235
Other, net (1,077) (1,131)
Gain on sale of investment securities - -
Income taxes applicable to other income (648) (862)
- - -------------------------------------------------------------------------------------------------------------
Income Before Interest Charges 84,925 86,275
- - -------------------------------------------------------------------------------------------------------------
Interest Charges:
Interest on long-term debt 39,479 40,769
Allowance for debt funds used during construction (8,651) (7,676)
Interest on notes payable 106 -
Amortization of debt discount, premium, and expense, net 488 287
Other interest charges 869 1,120
- - -------------------------------------------------------------------------------------------------------------
Net interest charges 32,291 34,500
- - -------------------------------------------------------------------------------------------------------------
Net Income 52,634 51,775
Dividends on Preferred Stock 6,213 6,291
- - -------------------------------------------------------------------------------------------------------------
Net Income After Dividends on Preferred Stock $ 46,421 $ 45,484
=============================================================================================================
</TABLE>
II-175C
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS
Gulf Power Company
============================================================================================================================
For the Years Ended December 31, 1995 1994 1993
- - ----------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
Operating Activities:
Net income $ 62,967 $ 61,154 $ 60,039
Adjustments to reconcile net income to net
cash provided by operating activities --
Depreciation and amortization 75,293 86,098 72,111
Deferred income taxes, net 390 (6,986) 5,347
Deferred investment tax credits, net - - -
Allowance for equity funds used during construction (36) (450) (512)
Non-cash proceeds from settlement of disputed contracts - - -
Other, net (26,537) 4,898 (864)
Changes in certain current assets and liabilities --
Receivables, net (12,210) 3,540 12,867
Inventories (618) (13,901) 5,574
Payables 18,258 (10,159) 5,386
Other (17,556) 610 (9,504)
- - ----------------------------------------------------------------------------------------------------------------------------
Net cash provided from operating activities 99,951 124,804 150,444
- - ----------------------------------------------------------------------------------------------------------------------------
Investing Activities:
Gross property additions (63,113) (78,869) (78,562)
Other 4,401 (3,493) (5,328)
- - ----------------------------------------------------------------------------------------------------------------------------
Net cash used for investing activities (58,712) (82,362) (83,890)
- - ----------------------------------------------------------------------------------------------------------------------------
Financing Activities and Capital Contributions:
Proceeds:
Preferred stock - - 35,000
First mortgage bonds - - 75,000
Pollution control bonds - 42,000 53,425
Capital contributions from parent company 58 98 11
Other long-term debt - 32,108 25,000
Retirements:
Preferred stock (1,000) (1,000) (21,060)
First mortgage bonds (1,750) (48,856) (88,809)
Pollution control bonds (125) (42,100) (40,650)
Other long-term debt (13,314) (24,240) (7,736)
Notes payable, net 27,000 47,447 (37,947)
Payment of preferred stock dividends (5,813) (5,925) (5,728)
Payment of common stock dividends (46,400) (44,000) (41,800)
Miscellaneous (117) (2,648) (6,888)
- - ----------------------------------------------------------------------------------------------------------------------------
Net cash provided from (used for) financing activities (41,461) (47,116) (62,182)
- - ----------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Cash and Cash Equivalents (222) (4,674) 4,372
Cash and Cash Equivalents at Beginning of Year 902 5,576 1,204
- - ----------------------------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Year $ 680 $ 902 $ 5,576
============================================================================================================================
( ) Denotes use of cash.
</TABLE>
II-176
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS
Gulf Power Company
============================================================================================================================
For the Years Ended December 31, 1992 1991 1990
- - ----------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
Operating Activities:
Net income $ 59,193 $ 63,033 $ 44,149
Adjustments to reconcile net income to net
cash provided by operating activities --
Depreciation and amortization 68,021 65,584 63,650
Deferred income taxes, net 3,322 (3,392) 1,837
Deferred investment tax credits, net - - -
Allowance for equity funds used during construction (14) (54) -
Non-cash proceeds from settlement of disputed contracts (920) (19,734) -
Other, net 185 3,079 1,544
Changes in certain current assets and liabilities --
Receivables, net (11,041) 12,421 (2,468)
Inventories 23,560 (2,397) (11,807)
Payables 1,580 (2,003) (3,440)
Other (13,637) 8,012 5,781
- - ----------------------------------------------------------------------------------------------------------------------------
Net cash provided from operating activities 130,249 124,549 99,246
- - ----------------------------------------------------------------------------------------------------------------------------
Investing Activities:
Gross property additions (64,671) (64,323) (62,462)
Other 3,970 (8,097) (1,597)
- - ----------------------------------------------------------------------------------------------------------------------------
Net cash used for investing activities (60,701) (72,420) (64,059)
- - ----------------------------------------------------------------------------------------------------------------------------
Financing Activities and Capital Contributions:
Proceeds:
Preferred stock 29,500 - -
First mortgage bonds 25,000 50,000 -
Pollution control bonds 8,930 21,200 -
Capital contributions from parent company 121 - 4,000
Other long-term debt - - -
Retirements:
Preferred stock (15,500) (2,500) (1,750)
First mortgage bonds (117,693) (32,807) (6,455)
Pollution control bonds (9,205) (21,250) (50)
Other long-term debt (5,783) (7,981) (6,083)
Notes payable, net 44,000 - -
Payment of preferred stock dividends (5,103) (5,237) (5,435)
Payment of common stock dividends (39,900) (38,000) (37,000)
Miscellaneous (8,760) (3,715) 5
- - ----------------------------------------------------------------------------------------------------------------------------
Net cash provided from (used for) financing activities (94,393) (40,290) (52,768)
- - ----------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Cash and Cash Equivalents (24,845) 11,839 (17,581)
Cash and Cash Equivalents at Beginning of Year 26,049 14,210 31,791
- - ----------------------------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Year $ 1,204 $ 26,049 $ 14,210
============================================================================================================================
( ) Denotes use of cash.
</TABLE>
II-177A
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS
Gulf Power Company
============================================================================================================================
For the Years Ended December 31, 1989 1988 1987
- - ----------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
Operating Activities:
Net income $ 42,983 $ 51,459 $ 48,242
Adjustments to reconcile net income to net
cash provided by operating activities --
Depreciation and amortization 59,955 56,260 51,672
Deferred income taxes, net 5,319 10,138 2,377
Deferred investment tax credits, net - - 868
Allowance for equity funds used during construction 446 (457) (1,013)
Non-cash proceeds from settlement of disputed contracts - - -
Other, net 3,827 11,449 12,913
Changes in certain current assets and liabilities --
Receivables, net 492 8,984 (8,849)
Inventories 16,306 (16,160) 23,691
Payables 6,142 (5,340) 10,173
Other 4,466 (18,432) 6,208
- - ----------------------------------------------------------------------------------------------------------------------------
Net cash provided from operating activities 139,936 97,901 146,282
- - ----------------------------------------------------------------------------------------------------------------------------
Investing Activities:
Gross property additions (70,726) (67,042) (97,511)
Other 419 (62,782) (692)
- - ----------------------------------------------------------------------------------------------------------------------------
Net cash used for investing activities (70,307) (129,824) (98,203)
- - ----------------------------------------------------------------------------------------------------------------------------
Financing Activities and Capital Contributions:
Proceeds:
Preferred stock - - -
First mortgage bonds - 35,000 -
Pollution control bonds - 3,677 35,996
Capital contributions from parent company 7,000 25,000 -
Other long-term debt - - -
Retirements:
Preferred stock (1,250) (1,750) (2,500)
First mortgage bonds (9,344) (9,369) -
Pollution control bonds (50) (50) (32,050)
Other long-term debt (5,611) (5,175) (4,774)
Notes payable, net - - -
Payment of preferred stock dividends (5,622) (5,761) (6,025)
Payment of common stock dividends (37,200) (35,400) (34,200)
Miscellaneous (3) (233) (1,632)
- - ----------------------------------------------------------------------------------------------------------------------------
Net cash provided from (used for) financing activities (52,080) 5,939 (45,185)
- - ----------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Cash and Cash Equivalents 17,549 (25,984) 2,894
Cash and Cash Equivalents at Beginning of Year 14,242 40,226 37,332
- - ----------------------------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Year $ 31,791 $ 14,242 $ 40,226
============================================================================================================================
( ) Denotes use of cash.
</TABLE>
II-177B
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS
Gulf Power Company
=========================================================================================================
For the Years Ended December 31, 1986 1985
- - ---------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C>
Operating Activities:
Net income $ 52,634 $ 51,775
Adjustments to reconcile net income to net
cash provided by operating activities --
Depreciation and amortization 41,619 39,595
Deferred income taxes, net 45,213 18,467
Deferred investment tax credits, net 1,634 5,716
Allowance for equity funds used during construction (7,809) (6,893)
Non-cash proceeds from settlement of disputed contracts - -
Other, net 5,860 (2,535)
Changes in certain current assets and liabilities --
Receivables, net (6,012) (5,401)
Inventories (1,342) 1,870
Payables 449 1,756
Other (113) (13,331)
- - ---------------------------------------------------------------------------------------------------------
Net cash provided from operating activities 132,133 91,019
- - ---------------------------------------------------------------------------------------------------------
Investing Activities:
Gross property additions (90,160) (92,541)
Other (55,652) 7,693
- - ---------------------------------------------------------------------------------------------------------
Net cash used for investing activities (145,812) (84,848)
- - ---------------------------------------------------------------------------------------------------------
Financing Activities and Capital Contributions:
Proceeds:
Preferred stock - -
First mortgage bonds 50,000 -
Pollution control bonds 9,900 18,776
Capital contributions from parent company - 6,000
Other long-term debt 60,663 -
Retirements:
Preferred stock (750) (750)
First mortgage bonds (46,640) (2,860)
Pollution control bonds (50) (50)
Other long-term debt - -
Notes payable, net - -
Payment of preferred stock dividends (6,213) (6,291)
Payment of common stock dividends (33,100) (30,800)
Miscellaneous (6,064) (227)
- - ---------------------------------------------------------------------------------------------------------
Net cash provided from (used for) financing activities 27,746 (16,202)
- - ---------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Cash and Cash Equivalents 14,067 (10,031)
Cash and Cash Equivalents at Beginning of Year 23,265 33,296
- - ---------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Year $ 37,332 $ 23,265
=========================================================================================================
( ) Denotes use of cash.
</TABLE>
II-177C
<PAGE>
<TABLE>
BALANCE SHEETS
Gulf Power Company
============================================================================================================================
At December 31, 1995 1994 1993
- - ----------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
ASSETS
Utility Plant:
Production-fossil $ 905,784 $ 896,236 $ 863,223
Transmission 156,786 155,967 154,304
Distribution 512,184 487,986 464,182
General 121,060 116,178 129,995
Construction work in progress 26,301 24,288 34,591
- - ----------------------------------------------------------------------------------------------------------------------------
Total utility plant 1,722,115 1,680,655 1,646,295
Accumulated provision for depreciation 658,806 622,911 610,542
- - ----------------------------------------------------------------------------------------------------------------------------
Total 1,063,309 1,057,744 1,035,753
Less property-related accumulated deferred income taxes - - -
- - ----------------------------------------------------------------------------------------------------------------------------
Total 1,063,309 1,057,744 1,035,753
- - ----------------------------------------------------------------------------------------------------------------------------
Other Property and Investments:
Securities received from settlement of disputed contracts - - -
Miscellaneous 740 7,997 13,242
- - ----------------------------------------------------------------------------------------------------------------------------
Total 740 7,997 13,242
- - ----------------------------------------------------------------------------------------------------------------------------
Current Assets:
Cash and cash equivalents 680 902 5,576
Investment securities - - -
Receivables, net 72,593 60,384 63,924
Fossil fuel stock, at average cost 37,875 35,686 20,652
Materials and supplies, at average cost 33,686 35,257 36,390
Current portion of deferred coal contract costs 12,767 2,521 12,535
Regulatory clauses under recovery 3,432 5,002 3,244
Prepayments 12,232 4,354 2,160
Vacation pay deferred 4,419 4,172 4,022
- - ----------------------------------------------------------------------------------------------------------------------------
Total 177,684 148,278 148,503
- - ----------------------------------------------------------------------------------------------------------------------------
Deferred Charges:
Deferred charges related to income taxes 29,093 30,433 31,334
Debt expense, being amortized 3,444 3,625 3,693
Premium on reacquired debt, being amortized 17,015 18,494 17,554
Deferred coal contract costs 33,768 38,169 52,884
Miscellaneous 16,806 10,802 4,846
- - ----------------------------------------------------------------------------------------------------------------------------
Total 100,126 101,523 110,311
- - ----------------------------------------------------------------------------------------------------------------------------
Total Assets $ 1,341,859 $ 1,315,542 $ 1,307,809
============================================================================================================================
</TABLE>
II-178
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
Gulf Power Company
============================================================================================================================
At December 31, 1992 1991 1990
- - ----------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
ASSETS
Utility Plant:
Production-fossil $ 841,489 $ 837,712 $ 817,490
Transmission 148,824 143,275 136,813
Distribution 443,352 419,228 400,016
General 127,826 125,330 123,059
Construction work in progress 29,564 13,684 16,868
- - ----------------------------------------------------------------------------------------------------------------------------
Total utility plant 1,591,055 1,539,229 1,494,246
Accumulated provision for depreciation 578,851 535,408 501,739
- - ----------------------------------------------------------------------------------------------------------------------------
Total 1,012,204 1,003,821 992,507
Less property-related accumulated deferred income taxes 200,904 197,138 192,749
- - ----------------------------------------------------------------------------------------------------------------------------
Total 811,300 806,683 799,758
- - ----------------------------------------------------------------------------------------------------------------------------
Other Property and Investments:
Securities received from settlement of disputed contracts - 19,938 -
Miscellaneous 7,074 6,410 5,439
- - ----------------------------------------------------------------------------------------------------------------------------
Total 7,074 26,348 5,439
- - ----------------------------------------------------------------------------------------------------------------------------
Current Assets:
Cash and cash equivalents 1,204 26,049 14,210
Investment securities 22,322 - -
Receivables, net 60,047 49,006 61,427
Fossil fuel stock, at average cost 29,492 52,106 50,469
Materials and supplies, at average cost 33,124 34,070 33,310
Current portion of deferred coal contract costs 3,071 4,626 6,212
Regulatory clauses under recovery 1,680 - 7,008
Prepayments 1,395 1,410 2,168
Vacation pay deferred 3,779 3,776 3,631
- - ----------------------------------------------------------------------------------------------------------------------------
Total 156,114 171,043 178,435
- - ----------------------------------------------------------------------------------------------------------------------------
Deferred Charges:
Deferred charges related to income taxes - - -
Debt expense, being amortized 3,253 3,232 2,954
Premium on reacquired debt, being amortized 15,319 8,855 6,256
Deferred coal contract costs 63,723 74,502 87,102
Miscellaneous 5,916 5,073 4,635
- - ----------------------------------------------------------------------------------------------------------------------------
Total 88,211 91,662 100,947
- - ----------------------------------------------------------------------------------------------------------------------------
Total Assets $1,062,699 $ 1,095,736 $ 1,084,579
============================================================================================================================
</TABLE>
II-179A
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
Gulf Power Company
============================================================================================================================
At December 31, 1989 1988 1987
- - ----------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
ASSETS
Utility Plant:
Production-fossil $ 807,546 $ 796,052 $ 801,600
Transmission 133,926 113,177 106,352
Distribution 375,521 343,421 325,037
General 119,779 115,273 102,664
Construction work in progress 10,166 29,572 10,113
- - ----------------------------------------------------------------------------------------------------------------------------
Total utility plant 1,446,938 1,397,495 1,345,766
Accumulated provision for depreciation 464,944 425,520 388,248
- - ----------------------------------------------------------------------------------------------------------------------------
Total 981,994 971,975 957,518
Less property-related accumulated deferred income taxes 186,084 178,657 166,707
- - ----------------------------------------------------------------------------------------------------------------------------
Total 795,910 793,318 790,811
- - ----------------------------------------------------------------------------------------------------------------------------
Other Property and Investments:
Securities received from settlement of disputed contracts - - -
Miscellaneous 6,933 6,756 2,932
- - ----------------------------------------------------------------------------------------------------------------------------
Total 6,933 6,756 2,932
- - ----------------------------------------------------------------------------------------------------------------------------
Current Assets:
Cash and cash equivalents 31,791 14,242 40,226
Investment securities - - -
Receivables, net 58,959 59,451 68,435
Fossil fuel stock, at average cost 37,526 55,286 43,290
Materials and supplies, at average cost 34,446 32,992 28,828
Current portion of deferred coal contract costs 5,534 6,194 2,642
Regulatory clauses under recovery 4,503 1,218 -
Prepayments 2,490 3,577 677
Vacation pay deferred 3,425 3,340 3,200
- - ----------------------------------------------------------------------------------------------------------------------------
Total 178,674 176,300 187,298
- - ----------------------------------------------------------------------------------------------------------------------------
Deferred Charges:
Deferred charges related to income taxes - - -
Debt expense, being amortized 3,117 3,281 3,203
Premium on reacquired debt, being amortized 6,574 6,892 7,210
Deferred coal contract costs 97,833 106,263 55,889
Miscellaneous 4,389 4,415 3,839
- - ----------------------------------------------------------------------------------------------------------------------------
Total 111,913 120,851 70,141
- - ----------------------------------------------------------------------------------------------------------------------------
Total Assets $1,093,430 $ 1,097,225 $ 1,051,182
============================================================================================================================
</TABLE>
II-179B
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
Gulf Power Company
=========================================================================================================
At December 31, 1986 1985
- - ---------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C>
ASSETS
Utility Plant:
Production-fossil $ 608,340 $ 599,613
Transmission 99,507 98,683
Distribution 295,052 274,656
General 66,092 56,427
Construction work in progress 188,966 148,969
- - ---------------------------------------------------------------------------------------------------------
Total utility plant 1,257,957 1,178,348
Accumulated provision for depreciation 350,117 318,308
- - ---------------------------------------------------------------------------------------------------------
Total 907,840 860,040
Less property-related accumulated deferred income taxes 152,589 135,388
- - ---------------------------------------------------------------------------------------------------------
Total 755,251 724,652
- - ---------------------------------------------------------------------------------------------------------
Other Property and Investments:
Securities received from settlement of disputed contracts - -
Miscellaneous 2,619 601
- - ---------------------------------------------------------------------------------------------------------
Total 2,619 601
- - ---------------------------------------------------------------------------------------------------------
Current Assets:
Cash and cash equivalents 37,332 23,265
Investment securities - -
Receivables, net 59,586 53,574
Fossil fuel stock, at average cost 69,785 73,890
Materials and supplies, at average cost 26,024 20,577
Current portion of deferred coal contract costs - -
Regulatory clauses under recovery - -
Prepayments 788 633
Vacation pay deferred 3,000 2,775
- - ---------------------------------------------------------------------------------------------------------
Total 196,515 174,714
- - ---------------------------------------------------------------------------------------------------------
Deferred Charges:
Deferred charges related to income taxes - -
Debt expense, being amortized 2,736 2,768
Premium on reacquired debt, being amortized - -
Deferred coal contract costs 60,663 -
Miscellaneous 11,080 18,900
- - ---------------------------------------------------------------------------------------------------------
Total 74,479 21,668
- - ---------------------------------------------------------------------------------------------------------
Total Assets $1,028,864 $ 921,635
=========================================================================================================
</TABLE>
II-179C
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
Gulf Power Company
============================================================================================================================
At December 31, 1995 1994 1993
- - ----------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock $ 38,060 $ 38,060 $ 38,060
Paid-in capital 218,438 218,380 218,282
Premium on preferred stock 81 81 81
Earnings retained in the business 179,663 168,951 157,773
- - ----------------------------------------------------------------------------------------------------------------------------
Total common equity 436,242 425,472 414,196
Preferred stock 89,602 89,602 89,602
Preferred stock subject to mandatory redemption - - 1,000
Long-term debt 323,376 356,393 369,259
- - ----------------------------------------------------------------------------------------------------------------------------
Total (excluding amount due within one year) 849,220 871,467 874,057
- - ----------------------------------------------------------------------------------------------------------------------------
Current Liabilities:
Notes payable to banks 80,500 53,500 6,053
Preferred stock due within one year - 1,000 1,000
Long-term debt due within one year 31,548 13,439 41,552
Accounts payable 41,643 23,656 38,699
Customer deposits 13,195 13,609 15,082
Taxes accrued 9,547 13,465 13,015
Interest accrued 5,719 6,106 5,420
Regulatory clauses over recovery 2,800 3,960 840
Vacation pay accrued 4,419 4,172 4,022
Miscellaneous 7,356 7,828 8,527
- - ----------------------------------------------------------------------------------------------------------------------------
Total 196,727 140,735 134,210
- - ----------------------------------------------------------------------------------------------------------------------------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 162,345 151,681 151,743
Deferred credits related to income taxes 67,481 71,964 76,876
Accumulated deferred investment tax credits 36,052 38,391 40,770
Miscellaneous 30,034 41,304 30,153
- - ----------------------------------------------------------------------------------------------------------------------------
Total 295,912 303,340 299,542
- - ----------------------------------------------------------------------------------------------------------------------------
Total Capitalization and Liabilities $ 1,341,859 $ 1,315,542 $ 1,307,809
============================================================================================================================
</TABLE>
II-180
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
Gulf Power Company
============================================================================================================================
At December 31, 1992 1991 1990
- - ----------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock $ 38,060 $ 38,060 $ 38,060
Paid-in capital 218,271 218,150 218,150
Premium on preferred stock 88 399 399
Earnings retained in the business 146,771 134,372 114,576
- - ----------------------------------------------------------------------------------------------------------------------------
Total common equity 403,190 390,981 371,185
Preferred stock 74,662 55,162 55,162
Preferred stock subject to mandatory redemption 2,000 7,500 9,250
Long-term debt 382,047 434,648 475,284
- - ----------------------------------------------------------------------------------------------------------------------------
Total (excluding amount due within one year) 861,899 888,291 910,881
- - ----------------------------------------------------------------------------------------------------------------------------
Current Liabilities:
Notes payable to banks 44,000 - -
Preferred stock due within one year 1,000 1,000 1,750
Long-term debt due within one year 13,820 59,111 9,452
Accounts payable 33,461 25,315 27,447
Customer deposits 15,532 15,513 15,551
Taxes accrued 11,419 19,274 19,610
Interest accrued 6,370 9,720 10,820
Regulatory clauses over recovery - 1,114 -
Vacation pay accrued 3,779 3,776 3,631
Miscellaneous 3,950 3,545 12,177
- - ----------------------------------------------------------------------------------------------------------------------------
Total 133,331 138,368 100,438
- - ----------------------------------------------------------------------------------------------------------------------------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes - 1,775 6,736
Deferred credits related to income taxes - - -
Accumulated deferred investment tax credits 43,117 45,446 47,776
Miscellaneous 24,352 21,856 18,748
- - ----------------------------------------------------------------------------------------------------------------------------
Total 67,469 69,077 73,260
- - ----------------------------------------------------------------------------------------------------------------------------
Total Capitalization and Liabilities $1,062,699 $ 1,095,736 $ 1,084,579
============================================================================================================================
</TABLE>
II-181A
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
Gulf Power Company
============================================================================================================================
At December 31, 1989 1988 1987
- - ----------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock $ 38,060 $ 38,060 $ 38,060
Paid-in capital 214,150 207,150 182,150
Premium on preferred stock 399 399 399
Earnings retained in the business 112,862 112,701 102,403
- - ----------------------------------------------------------------------------------------------------------------------------
Total common equity 365,471 358,310 323,012
Preferred stock 55,162 55,162 55,162
Preferred stock subject to mandatory redemption 11,000 12,750 14,000
Long-term debt 484,608 497,069 474,640
- - ----------------------------------------------------------------------------------------------------------------------------
Total (excluding amount due within one year) 916,241 923,291 866,814
- - ----------------------------------------------------------------------------------------------------------------------------
Current Liabilities:
Notes payable to banks - - -
Preferred stock due within one year 1,750 1,250 1,750
Long-term debt due within one year 12,588 15,005 13,225
Accounts payable 34,764 29,595 34,500
Customer deposits 15,752 15,316 15,565
Taxes accrued 12,388 10,683 7,850
Interest accrued 10,105 10,247 9,584
Regulatory clauses over recovery - - 9,330
Vacation pay accrued 3,425 3,340 3,200
Miscellaneous 7,759 2,748 2,144
- - ----------------------------------------------------------------------------------------------------------------------------
Total 98,531 88,184 97,148
- - ----------------------------------------------------------------------------------------------------------------------------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 13,381 17,678 22,992
Deferred credits related to income taxes - - -
Accumulated deferred investment tax credits 50,109 52,451 54,597
Miscellaneous 15,168 15,621 9,631
- - ----------------------------------------------------------------------------------------------------------------------------
Total 78,658 85,750 87,220
- - ----------------------------------------------------------------------------------------------------------------------------
Total Capitalization and Liabilities $ 1,093,430 $ 1,097,225 $ 1,051,182
============================================================================================================================
</TABLE>
II-181B
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
Gulf Power Company
=========================================================================================================
At December 31, 1986 1985
- - ---------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C>
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock $ 38,060 $ 38,060
Paid-in capital 182,150 182,150
Premium on preferred stock 399 399
Earnings retained in the business 94,386 81,065
- - ---------------------------------------------------------------------------------------------------------
Total common equity 314,995 301,674
Preferred stock 55,162 55,162
Preferred stock subject to mandatory redemption 16,500 18,250
Long-term debt 482,869 410,917
- - ---------------------------------------------------------------------------------------------------------
Total (excluding amount due within one year) 869,526 786,003
- - ---------------------------------------------------------------------------------------------------------
Current Liabilities:
Notes payable to banks - -
Preferred stock due within one year 1,750 750
Long-term debt due within one year 4,823 2,910
Accounts payable 24,014 23,565
Customer deposits 14,715 13,753
Taxes accrued 10,986 13,240
Interest accrued 11,024 11,783
Regulatory clauses over recovery - -
Vacation pay accrued 3,000 2,775
Miscellaneous 3,869 4,966
- - ---------------------------------------------------------------------------------------------------------
Total 74,181 73,742
- - ---------------------------------------------------------------------------------------------------------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 23,550 -
Deferred credits related to income taxes - -
Accumulated deferred investment tax credits 55,843 55,846
Miscellaneous 5,764 6,044
- - ---------------------------------------------------------------------------------------------------------
Total 85,157 61,890
- - ---------------------------------------------------------------------------------------------------------
Total Capitalization and Liabilities $ 1,028,864 $ 921,635
=========================================================================================================
</TABLE>
II-181C
<PAGE>
GULF POWER COMPANY
OUTSTANDING SECURITIES AT DECEMBER 31, 1995
First Mortgage Bonds
Amount Interest Amount
Series Issued Rate Outstanding Maturity
- - --------------------------------------------------------------------------------
(Thousands) (Thousands)
1992 $ 25,000 5-7/8% $ 25,000 8/1/97
1993 15,000 5.55% 15,000 4/1/98
1993 30,000 5% 30,000 7/1/98
1993 30,000 6-1/8% 30,000 7/1/03
1978 25,000 9% 930 9/1/08
1991 50,000 8-3/4% 50,000 12/1/21
------------ ------------
$ 175,000 $ 150,930
============ ============
Pollution Control Bonds
Amount Interest Amount
Series Issued Rate Outstanding Maturity
- - --------------------------------------------------------------------------------
(Thousands) (Thousands)
1976 $ 12,500 6% $ 12,075 10/1/06
1987 32,000 8-1/4% 32,000 6/1/17
1991 21,200 7-1/8% 21,200 4/1/21
1992 8,930 6-3/4% 8,930 3/1/22
1993 13,000 6.20% 13,000 4/1/23
1993 32,550 5.80% 32,550 6/1/23
1993 7,875 5.70% 7,875 11/1/23
1994 22,000 6.30% 22,000 9/1/24
1994 20,000 Variable 20,000 9/1/24
============ ===========
$ 170,055 $ 169,630
============ ===========
Preferred Stock
Shares Dividend Amount
Series Outstanding Rate Outstanding
- - --------------------------------------------------------------------
(Thousands)
1950 51,026 4.64% $ 5,102
1960 50,000 5.16% 5,000
1966 50,000 5.44% 5,000
1969 50,000 7.52% 5,000
1972 50,000 7.88% 5,000
1992 580,000 7% 14,500
1992 600,000 7.30% 15,000
1993 800,000 6.72% 20,000
1993 600,000 Adjustable 15,000
============ ===========
2,831,026 $ 89,602
============ ===========
II-182
<PAGE>
GULF POWER COMPANY
SECURITIES RETIRED DURING 1995
First Mortgage Bonds
Principal Interest
Series Amount Rate
- - --------------------------------------------------------------------------------
(Thousands)
1978 $ 1,750 9%
Pollution Control Bonds
Principal Interest
Series Amount Rate
- - --------------------------------------------------------------------------------
(Thousands)
1976 $ 125 6%
Preferred Stock
Principal Dividend
Series Amount Rate
- - --------------------------------------------------------------------------------
(Thousands)
1980 $ 1,000 11.36%
II-183
<PAGE>
MISSISSIPPI POWER COMPANY
FINANCIAL SECTION
II-184
<PAGE>
MANAGEMENT'S REPORT
Mississippi Power Company 1995 Annual Report
The management of Mississippi Power Company has prepared--and is responsible
for--the financial statements and related information included in this report.
These statements were prepared in accordance with generally accepted accounting
principles appropriate in the circumstances and necessarily include amounts that
are based on best estimates and judgments of management. Financial information
throughout this annual report is consistent with the financial statements.
The Company maintains a system of internal accounting controls to provide
reasonable assurance that assets are safeguarded and that books and records
reflect only authorized transactions of the Company. Limitations exist in any
system of internal controls, however, based upon a recognition that the cost of
the system should not exceed its benefits. The Company believes its system of
internal accounting control maintains an appropriate cost/benefit relationship.
The Company's system of internal accounting controls is evaluated on an
ongoing basis by the internal audit staff. The Company's independent public
accountants also consider certain elements of the internal control system in
order to determine their auditing procedures for the purpose of expressing an
opinion on the financial statements.
The audit committee of the board of directors, composed of four directors
who are not employees, provides a broad overview of management's financial
reporting and control functions. Periodically, this committee meets with
management, the internal auditors, and the independent public accountants to
ensure that these groups are fulfilling their obligations and to discuss
auditing, internal controls, and financial reporting matters. The internal
auditors and independent public accountants have access to the members of the
audit committee at any time.
Management believes that its policies and procedures provide reasonable
assurance that the Company's operations are conducted according to a high
standard of business ethics.
In management's opinion, the financial statements present fairly, in all
material respects, the financial position, results of operations, and cash flows
of Mississippi Power Company in conformity with generally accepted accounting
principles.
/s/ Dwight H. Evans
Dwight H. Evans
President and Chief Executive Officer
/s/ Michael W. Southern
Michael W. Southern
Vice President, Secretary, Treasurer and
Chief Financial Officer
February 21, 1996
II-185
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of
Mississippi Power Company:
We have audited the accompanying balance sheets and statements of capitalization
of Mississippi Power Company (a Mississippi corporation and a wholly owned
subsidiary of The Southern Company) as of December 31, 1995 and 1994, and the
related statements of income, retained earnings, paid-in capital, and cash flows
for each of the three years in the period ended December 31, 1995. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements (pages II-194 through II-209)
referred to above present fairly, in all material respects, the financial
position of Mississippi Power Company as of December 31, 1995 and 1994, and the
results of its operations and its cash flows for the periods stated, in
conformity with generally accepted accounting principles.
/s/ Arthur Andersen LLP
Atlanta, Georgia
February 21, 1996
II-186
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION
Mississippi Power Company 1995 Annual Report
RESULTS OF OPERATIONS
Earnings
Mississippi Power Company's net income after dividends on preferred stock for
1995 totaled $52.5 million, an increase of $3.4 million over the prior year.
This improvement is attributable primarily to increased energy sales and a rate
increase under the Environmental Compliance Overview Plan (ECO Plan) of $3.7
million annually which became effective in May 1995.
A comparison of 1994 to 1993 reflects an increase in 1994 earnings of $6.7
million. Earnings in 1994 increased due to higher energy sales and increases
in retail and wholesale rates.
In July 1993, a retail rate increase of $6.4 million annually became
effective under the Company's Performance Evaluation Plan (PEP). Effective April
1994, retail rates increased by $7.6 million annually under the ECO Plan. Also,
effective in April 1994 was a $3.6 million wholesale rate increase.
Revenues
The following table summarizes the factors impacting operating revenues for the
past three years:
Increase (Decrease)
from Prior Year
-----------------------------------
1995 1994 1993
-----------------------------------
(in thousands)
Retail --
Change in base
rates (PEP and
ECO Plan) $ 2,694 $9,314 $ 5,079
Sales growth 4,045 9,560 5,606
Weather 4,513 1,752 4,735
Fuel cost
recovery
and other 3,806 6,594 15,028
-------------------------------------------------------------
Total retail 15,058 27,220 30,448
-------------------------------------------------------------
Sales for resale --
Non-affiliates 3,698 4,611 3,298
Affiliates (1,847) (5,981) 5,464
-------------------------------------------------------------
Total sales for
resale 1,851 (1,370) 8,762
Other operating
revenues 482 (1,571) 1,226
-------------------------------------------------------------
Total operating
revenues $17,391 $24,279 $40,436
=============================================================
Percent change 3.5% 5.1% 9.3%
-------------------------------------------------------------
Retail revenues of $410 million in 1995 increased 3.8 percent over the prior
year, compared with increases of 7.4 percent and 9.0 percent in 1994 and 1993,
respectively. The increase in retail revenues for 1995 was a result of growth in
energy sales of 6.7% and 6.2% to commercial and residential customers,
respectively, due to above normal summer temperatures. Additionally in 1995, an
increase in the number of customers and a retail rate increase from the ECO Plan
had a positive effect on retail revenues. A comparison of retail revenues of
1994 to 1993 reflects an increase resulting from growth in energy sales and
customers and retail and wholesale rate increases. Changes in base rates reflect
rate changes made under the PEP and ECO Plan.
Under the fuel cost recovery provision, recorded fuel revenues are equal to
recorded fuel expenses, including the fuel component and the operation and
maintenance component of purchased energy. Therefore, changes in recoverable
II-187
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Mississippi Power Company 1995 Annual Report
fuel expenses are offset with corresponding changes in fuel revenues and have no
effect on net income.
Included in sales for resale to non-affiliates are revenues from rural
electric cooperative associations and municipalities located in southeastern
Mississippi. Energy sales to these customers increased 13.1 percent in 1995 and
7.8 percent in 1994 with the related revenues rising 16.7 percent and 14.0
percent, respectively. The customer demand experienced by these utilities is
determined by factors very similar to Mississippi Power's.
Sales for resale to non-territorial utilities are primarily under long-term
contracts consisting of capacity and energy components. Capacity revenues
reflect the recovery of fixed costs and a return on investment under the
contracts. Energy is generally sold at variable cost. Under these long-term
contracts, the capacity and energy components were:
1995 1994 1993
-------------------------------------
(in thousands)
Capacity $ 268 $ 1,965 $ 4,191
Energy 3,627 8,473 12,120
==========================================================
Total $3,895 $10,438 $16,311
==========================================================
Capacity revenues for Mississippi Power varied due to changes in the
contracts and in the allocation of transmission capacity revenues throughout the
Southern electric system. Most of the Company's capacity revenues are derived
from transmission charges.
Sales to affiliated companies within the Southern electric system will vary
from year to year depending on demand and the availability and cost of
generating resources at each company. These sales have no material impact on
earnings.
Below is a breakdown of kilowatt-hour sales for 1995 and the percent change
for the last three years:
Amount Percent Change
(millions of ----------- ------------------------------
kilowatt-hours) 1995 1995 1994 1993
---------- ------------------------------
Residential 2,041 6.2% (0.4)% 6.9%
Commercial 2,242 6.7 8.6 6.8
Industrial 3,813 (0.9) 6.2 2.5
Other 39 1.1 (0.5) 0.3
----------
Total retail 8,135 2.9 5.1 4.7
Sales for
resale --
Non-affiliates 2,493 (2.4) 0.4 (5.3)
Affiliates 244 39.7 (59.2) 52.2
----------
Total 10,872 2.2% 1.3% 3.3%
================================================================
Total retail energy sales in 1995 increased, compared to the previous year,
due to both weather influences and the continued improving economy within the
Company's service area, related primarily to the casino industry. In 1994, the
most notable factor that increased commercial energy sales above the 1993 level
was the establishment of casinos within the Company's service area. While the
Company expects the number of new casinos to slow appreciably, it anticipates
continued growth in ancillary services such as lodging, food, transportation,
etc. Also, energy demand is expected to grow as a result of a larger and more
fully employed population.
In addition to the previously discussed long-term contracts, energy sales to
non-affiliates include economy sales and amounts sold under short-term
contracts. Sales for resale to non-affiliates are influenced by those utilities'
own customer demand, plant availability, and the cost of their predominant fuels
- - -- oil and natural gas.
Expenses
Total operating expenses for 1995 increased from 1994 due to higher fuel
expenses, increased other operation expenses and increased depreciation and
amortization. Expenses in 1994 were higher than 1993 primarily because of higher
taxes and an increase in maintenance expenses and depreciation and amortization.
Fuel costs constitute the single largest expense for Mississippi Power.
These costs increased in 1995 due to a 13.0% increase in generation caused by
higher demand for energy throughout the Southern electric system. Further, this
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MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Mississippi Power Company 1995 Annual Report
increased demand for energy resulted in higher purchased power costs from the
non-affiliates and lower purchased power costs from the affiliates of the
Southern electric system. Fuel expenses in 1994, compared to 1993, were lower
due to decreased generation reflecting lower demand.
Purchased power consists primarily of energy purchases from the affiliates
of the Southern electric system. Purchased power transactions (both sales and
purchases) among Mississippi Power and its affiliates will vary from period to
period depending on demand and the availability and variable production cost at
each generating unit in the Southern electric system.
The amount and sources of energy supply, the average cost of fuel per net
kilowatt-hour generated, and the total average cost of energy supply (including
purchased power) were as follows:
1995 1994 1993
------------------------------
Total generation
(millions of
kilowatt-hours) 8,368 7,408 7,836
Sources of generation
generation (percent) --
Coal 58 56 64
Gas 15 10 7
Oil * * *
Purchased Power 27 34 29
Average cost of fuel per
net kilowatt-hour
generated (cents) --
Coal 1.58 1.67 1.66
Gas 2.32 2.56 2.99
Oil 6.21 4.15 2.85
Total average cost
of energy supply 1.53 1.55 1.58
- - --------------------------------------------------------------
* Not meaningful because of minimal generation from the fuel source.
Other operation expenses increased in 1995 due to an increase in generation,
emission allowance expenses of $2.6 million and an increase in costs associated
with work force reduction programs. (See Note 2 to the financial statements for
information on these work force reduction programs.) This increase in expenses
was offset by a decrease in maintenance costs for 1995, when compared to 1994.
In 1994, work force reduction programs contributed to the increase in other
operation expenses above the recorded 1993 level.
Depreciation and amortization increased in 1995, compared to 1994, due to
additional plant investments. In 1994, depreciation and amortization expenses
rose above 1993 primarily due to the addition in May 1994 of a 75 megawatt
combustion turbine unit.
In 1995, taxes other than income taxes rose above the amount recorded for
1994 due to higher municipal franchise taxes. Taxes other than income taxes
increased in 1994, when compared to 1993, because of higher ad valorem taxes,
which are property based, and municipal franchise taxes, which are revenue
based.
The change in income taxes between 1995 and 1994 reflects the change in
operating income. The increase in income taxes in 1994 when compared to 1993
mirrored the increase in operating income.
Effects of Inflation
Mississippi Power is subject to rate regulation and income tax laws that are
based on the recovery of historical costs. Therefore, inflation creates an
economic loss because the Company is recovering its costs of investments in
dollars that have less purchasing power. While the inflation rate has been
relatively low in recent years, it continues to have an adverse effect on the
Company because of the large investment in long-lived utility plant.
Conventional accounting for historical costs does not recognize this economic
loss nor the partially offsetting gain that arises through financing facilities
with fixed-money obligations, such as long-term debt and preferred stock. Any
recognition of inflation by regulatory authorities is reflected in the rate of
return allowed.
Future Earnings Potential
The results of operations for the past three years are not necessarily
indicative of future earnings potential. The level of future earnings depends on
numerous factors ranging from regulatory matters to energy sales growth to a
less regulated more competitive environment. Expenses are subject to constant
review and cost control programs. Mississippi Power is also maximizing the
utility of invested capital and minimizing the need for capital by refinancing,
decreasing the average fuel stockpile, raising generating plant availability and
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MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Mississippi Power Company 1995 Annual Report
efficiency, and aggressively controlling the construction budget. Operating
revenues will be affected by any changes in rates under the PEP, the Company's
performance based ratemaking plan, and the ECO Plan. PEP has proven to be a
stabilizing force on electric rates, with only moderate changes in rates taking
place.
The ECO Plan, provides for recovery of costs associated with environmental
projects approved by the Mississippi Public Service Commission (MPSC), most of
which are required to comply with Clean Air Act Amendments of 1990 (Clean Air
Act) regulations. The ECO Plan is operated independently of PEP. The Clean Air
Act and other important environmental items are discussed later under
"Environmental Matters."
The Federal Energy Regulatory Commission (FERC) regulates wholesale rate
schedules and power sales contracts that Mississippi Power has with its sales
for resale customers. The FERC is currently reviewing the rate of return on
common equity included in these schedules and contracts and may require such
returns to be lowered, possibly retroactively.
Further discussion of PEP, the ECO Plan, and proceedings before the FERC is
made in Note 3 to the financial statements herein.
Future earnings in the near term will depend upon growth in energy sales,
which are subject to a number of factors. Traditionally, these factors have
included weather, competition, changes in contracts with neighboring utilities,
energy conservation practiced by customers, the elasticity of demand, and the
rate of economic growth in Mississippi Power's service area. However, the Energy
Policy Act of 1992 (Energy Act) is beginning to have a dramatic effect on the
future of the electric utility industry. The Energy Act promotes energy
efficiency, alternative fuel use, and increased competition for electric
utilities. The Southern Company is positioning the business to meet the
challenge of this major change in the traditional practice of selling
electricity. The Energy Act allows Independent Power Producers (IPPs) to access
a utility's transmission network in order to sell electricity to other
utilities. This may enhance the incentive of IPPs to build cogeneration plants
for a utility's large industrial and commercial customers and sell excess
generation to other utilities. Although the Energy Act does not require
transmission access to retail customers, retail wheeling initiatives are rapidly
evolving and becoming very prominent issues in several states. In order to
address these initiatives, numerous questions must be resolved with the most
complex ones relating to transmission pricing and recovery of stranded
investments. As the initiatives become a reality, the structure of the utility
industry could radically change. Therefore, unless Mississippi Power remains a
low-cost producer and provides quality service, the Company's retail energy
sales growth could be limited, and this could significantly erode earnings.
Conversely, being the low-cost producer could provide significant opportunities
to increase market share and profitability.
Mississippi Power is subject to the provisions of Financial Accounting
Standards Board Statement No. 71, Accounting for the Effects of Certain Types of
Regulation. In the event that a portion of the Company's operations is no longer
subject to these provisions, the Company would be required to write off related
regulatory assets and liabilities, and determine if any other assets have been
impaired. See Note 1 to the financial statements under "Regulatory Assets and
Liabilities," for additional information.
New Accounting Standards
The FASB has issued Statement No. 121, Accounting for the Impairment of
Long-Lived Assets and Long-Lived Assets to Be Disposed Of. This statement
requires that long-lived assets be reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount for an asset may not
be recoverable. This statement also imposes stricter criteria for regulatory
assets by requiring that such assets be probable of future recovery at each
balance sheet date. The Company adopted the new rules January 1, 1996, with no
material effect on the financial statements. However, this conclusion may change
in the future as competitive factors influence wholesale and retail pricing in
the utility industry.
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MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Mississippi Power Company 1995 Annual Report
FINANCIAL CONDITION
Overview
The principal changes in Mississippi Power's financial condition during 1995
were gross property additions to utility plant of $68 million. Funding for gross
property additions and other capital requirements came primarily from earnings
and other operating cash flows and from the sale of first mortgage bonds and
pollution control bonds. The Statements of Cash Flows provide additional
details.
Financing Activity
Mississippi sold $30 million of first mortgage bonds and $10.6 million of
pollution control bonds during 1995. Retirements, including maturities during
1995, primarily related to other long-term debt, totaled some $42 million of
securities. (See the Statements of Cash Flows for further details.) Composite
financing rates for the years 1993 through 1995 as of year-end were as follows:
1995 1994 1993
-----------------------------
Composite interest rate on
long-term debt 6.63% 6.44% 6.57%
Composite preferred stock
dividend rate 6.58% 6.58% 6.58%
-----------------------------------------------------------
Capital Structure
At year-end 1995, the Company's ratio of common equity to total capitalization,
excluding long-term debt due within one year, was 50.8 percent, compared to 48.7
percent in 1994. The increase in equity ratio in 1995 is attributed to a
decrease in long-term debt and additional retained earnings.
Capital Requirements for Construction
The Company's projected construction expenditures for the next three years total
$182 million ($67 million in 1996, $62 million in 1997, and $53 million in
1998). The major emphasis within the construction program will be on upgrading
existing facilities. Also included in the estimates for property additions for
the three-year period is $5.3 million committed to meeting the requirements of
Clean Air Act regulations. Revisions may be necessary because of factors such as
changes in business conditions, revised load projections, the availability and
cost of capital, and changes in environmental regulations.
Other Capital Requirements
In addition to the funds required for the Company's construction program,
approximately $92.3 million will be required by the end of 1998 for present
sinking fund requirements and maturities of long-term debt. Mississippi Power
plans to continue, when economically feasible, to retire higher cost debt and
preferred stock and replace these obligations with lower-cost capital.
Environmental Matters
In November 1990, the Clean Air Act was signed into law. Title IV of the Clean
Air Act -- the acid rain compliance provision of the law -- has significantly
impacted Mississippi Power and the other operating companies of The Southern
Company. Specific reductions in sulfur dioxide and nitrogen oxide emissions from
fossil-fired generating plants are required in two phases. Phase I compliance
began in 1995 and initially affected 28 generating plants in the Southern
electric system. As a result of The Southern Company's compliance strategy, an
additional 22 generating units were brought into compliance with Phase I
requirements. Phase II compliance is required in 2000, and all fossil-fired
generating plants will be affected.
In 1995, the Environmental Protection Agency (EPA) began issuing annual
sulfur dioxide emission allowances through the allowance trading program. An
emission allowance is the authority to emit one ton of sulfur dioxide during a
calendar year. The method for issuing allowances is based on the fossil fuel
consumed from 1985 through 1987 for each affected generating unit. Emission
allowances are transferable and can be bought, sold, or banked and used in the
future.
The sulfur dioxide emission allowance program is expected to minimize the
cost of compliance. The Southern Company's sulfur dioxide compliance strategy is
designed to take advantage of allowances as a compliance option.
The Southern Company achieved Phase I sulfur dioxide compliance at the
affected plants by switching to low-sulfur coal, which has required some
equipment upgrades. This compliance strategy resulted in unused emission
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<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Mississippi Power Company 1995 Annual Report
allowances being banked for later use. Compliance with nitrogen oxide emission
limits was achieved by installation of new control equipment at 22 of the
original 28 affected generating units. Construction expenditures for Phase I
compliance totaled approximately $320 million through 1995 for The Southern
Company, of which Mississippi Power's portion was approximately $65 million.
For Phase II sulfur dioxide compliance, The Southern Company could use
emission allowances banked during Phase I, increase fuel switching, install flue
gas desulfurization equipment at selected plants, and/or purchase more
allowances depending on the price and availability of allowances. Also, in Phase
II, equipment to control nitrogen oxide emissions will be installed on
additional system fossil-fired plants as required to meet Phase II limits.
Therefore, during the period 1996 to 2000, current compliance strategy for The
Southern Company could require total estimated construction expenditures of
approximately $150 million, of which Mississippi Power's portion is
approximately $5 million. However, the full impact of Phase II compliance cannot
now be determined with certainty, pending the continuing development of a market
for emission allowances, the completion of EPA regulations, and the possibility
of new emission reduction technologies.
An average increase of up to 2 percent in revenue requirements from
customers could be necessary to fully recover the Company's cost of compliance
for both Phase I and II of Title IV of the Clean Air Act. Compliance costs
include construction expenditures, increased costs for switching to low-sulfur
coal, and costs related to emission allowances.
Mississippi Power's ECO Plan is designed to allow recovery of costs of
compliance with the Clean Air Act, as well as other environmental statutes and
regulations. The MPSC reviews environmental projects and the Company's
environmental policy through the ECO Plan. Under the ECO Plan, any increase in
the annual revenue requirement is limited to 2 percent of retail revenues.
However, the plan also provides for carryover of any amount over the 2 percent
limit into the next year's revenue requirement. Mississippi Power's management
believes that the ECO Plan provides for recovery of the Clean Air Act costs.
Under the ECO Plan, the Company had annual retail rate increases of $2.6
million, $7.6 million and $3.7 million in the years 1993, 1994 and 1995,
respectively. On January 29, 1996, the Company filed the ECO Plan with the MPSC
requesting an annual retail rate decrease of $3.0 million.
Title III of the Clean Air Act requires a multi-year EPA study of power
plant emissions of hazardous air pollutants. The EPA is scheduled to submit a
report to Congress on the results of this study during 1996. The report will
include a decision on whether additional regulatory control of these substances
is warranted. Compliance with any new control standard could result in
significant additional costs. The impact of new standards -- if any -- will
depend on the development and implementation of applicable regulations.
The EPA is evaluating the need to revise the ambient air quality standards
for particulate matter and ozone. The impact of any new standard will depend on
the level chosen for the standard and cannot be determined at this time.
In 1996, the EPA may issue revised rules on air quality control regulations
related to stack height requirements of the Clean Air Act. The full impact of
the final rules cannot be determined at this time, pending their development and
implementation.
In 1993, the EPA issued a ruling confirming the non-hazardous status of coal
ash. However, the EPA has until 1998 to classify co-managed utility wastes --
coal ash and other utility wastes -- as either non-hazardous or hazardous. If
the EPA classifies the co-managed wastes as hazardous, then substantial
additional costs for the management of such wastes may be required. The full
impact of any change in the regulatory status will depend on the subsequent
development of co-managed waste requirements.
The Company must comply with other environmental laws and regulations that
cover the handling and disposal of hazardous waste. Under these various laws and
regulations, the Company could incur costs to clean up properties currently or
previously owned. Upon identifying potential sites, the Company conducts
studies, when possible, to determine the extent of any required cleanup costs.
Should remediation be determined to be probable, reasonable estimates of costs
to clean up such sites are developed and recognized in the financial statements.
A currently owned site where manufactured gas plant operations were located
prior to the Company's ownership was investigated for potential remediation. The
remedial investigation has been concluded and is pending approval by the
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MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Mississippi Power Company 1995 Annual Report
Mississippi Department of Environmental Quality. In recognition of probable
further study and remediation, the Company in 1995 recorded a liability and a
deferred debit (regulatory asset) of $1.8 million, including feasibility study
costs. The Company recognizes such costs as they are incurred and recovers them
under the ECO Plan as provided in the Company's 1995 ECO order. If this site
were required to be remediated, industry studies show the Company could incur
cleanup costs ranging from $1.5 million to $10 million before giving
consideration to possible recovery of clean-up costs from other parties.
Several major pieces of environmental legislation are being considered for
reauthorization or amendment by Congress. These include: the Clean Air Act; the
Clean Water Act; the Comprehensive Environmental Response, Compensation, and
Liability Act; the Resource Conservation and Recovery Act; and the Endangered
Species Act. Changes to these laws could affect many areas of the Company's
operations. The full impact of these requirements cannot be determined at this
time, pending the development and implementation of applicable regulations.
Compliance with possible new legislation related to global climate change,
electromagnetic fields, and other environmental and health concerns could
significantly affect the Company. The impact of new legislation -- if any --
will depend on the subsequent development and implementation of applicable
regulations. In addition, the potential exists for liability as the result of
lawsuits alleging damages caused by electromagnetic fields.
Sources of Capital
At December 31, 1995, the Company had $70 million of committed credit in
revolving credit agreements and also had $27 million of committed short-term
credit lines. The Company had no short-term notes payable outstanding at year
end 1995.
It is anticipated that the funds required for construction and other
purposes, including compliance with environmental regulations, will be derived
from operations, the sale of additional first mortgage bonds, pollution control
obligations, and preferred stock, and the receipt of additional capital
contributions from The Southern Company. Mississippi Power is required to meet
certain coverage requirements specified in its mortgage indenture and corporate
charter to issue new first mortgage bonds and preferred stock. The Company's
coverage ratios are sufficiently high enough to permit, at present interest rate
levels, any foreseeable security sales. The amount of securities which the
Company will be permitted to issue in the future will depend upon market
conditions and other factors prevailing at that time.
II-193
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF INCOME
For the Years Ended December 31, 1995, 1994, and 1993
Mississippi Power Company 1995 Annual Report
- - -------------------------------------------------------------------------------------------------------------------
1995 1994 1993
- - -------------------------------------------------------------------------------------------------------------------
(in thousands)
<S> <C> <C> <C>
Operating Revenues (Notes 1 and 3):
Revenues $ 508,862 $ 489,624 $ 459,364
Revenues from affiliates 7,691 9,538 15,519
- - -------------------------------------------------------------------------------------------------------------------
Total operating revenues 516,553 499,162 474,883
- - -------------------------------------------------------------------------------------------------------------------
Operating Expenses:
Operation --
Fuel 111,071 102,216 113,986
Purchased power from non-affiliates 6,019 2,711 2,198
Purchased power from affiliates 57,777 68,543 58,019
Other 107,296 97,988 100,381
Maintenance 39,627 45,785 44,001
Depreciation and amortization 39,224 35,716 33,099
Taxes other than income taxes 42,443 41,742 37,145
Federal and state income taxes (Note 8) 34,486 31,386 22,668
- - -------------------------------------------------------------------------------------------------------------------
Total operating expenses 437,943 426,087 411,497
- - -------------------------------------------------------------------------------------------------------------------
Operating Income 78,610 73,075 63,386
Other Income (Expense):
Allowance for equity funds used during construction 366 1,099 1,010
Interest income 199 87 517
Other, net 4,596 2,033 3,971
Income taxes applicable to other income (1,006) (227) (1,158)
- - -------------------------------------------------------------------------------------------------------------------
Income Before Interest Charges 82,765 76,067 67,726
- - -------------------------------------------------------------------------------------------------------------------
Interest Charges:
Interest on long-term debt 21,898 19,725 17,688
Allowance for debt funds used during construction (399) (1,039) (788)
Interest on notes payable 1,141 1,442 1,000
Amortization of debt discount, premium, and expense, net 1,510 1,479 1,262
Other interest charges 1,185 404 728
- - -------------------------------------------------------------------------------------------------------------------
Net interest charges 25,335 22,011 19,890
- - -------------------------------------------------------------------------------------------------------------------
Net Income 57,430 54,056 47,836
Dividends on Preferred Stock 4,899 4,899 5,400
- - -------------------------------------------------------------------------------------------------------------------
Net Income After Dividends on Preferred Stock $ 52,531 $ 49,157 $ 42,436
===================================================================================================================
The accompanying notes are an integral part of these statements.
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS
For the Years ended December 31, 1995, 1994, and 1993
Mississippi Power Company 1995 Annual Report
- - ----------------------------------------------------------------------------------------------------------------------------------
1995 1994 1993
- - ----------------------------------------------------------------------------------------------------------------------------------
(in thousands)
<S> <C> <C> <C>
Operating Activities:
Net income $ 57,430 $ 54,056 $ 47,836
Adjustments to reconcile net income to net
cash provided by operating activities --
Depreciation and amortization 51,588 47,827 45,660
Deferred income taxes (480) 1,563 5,039
Allowance for equity funds used during construction (366) (1,099) (1,010)
Other, net 5,704 5,230 3,005
Changes in certain current assets and liabilities --
Receivables, net (8,758) 3,066 (4,347)
Inventories 3,962 (9,856) 11,119
Payables 17,421 (8,754) 4,133
Other 681 3,334 (8,033)
- - ----------------------------------------------------------------------------------------------------------------------------------
Net cash provided from operating activities 127,182 95,367 103,402
- - ----------------------------------------------------------------------------------------------------------------------------------
Investing Activities:
Gross property additions (67,570) (104,014) (139,976)
Other (1,697) (14,087) 7,562
- - ----------------------------------------------------------------------------------------------------------------------------------
Net cash used for investing activities (69,267) (118,101) (132,414)
- - ----------------------------------------------------------------------------------------------------------------------------------
Financing Activities:
Proceeds:
Capital contributions - 25,000 30,036
Preferred stock - - 23,404
First mortgage bonds 30,000 35,000 70,000
Pollution control bonds 10,600 - 38,875
Other long-term debt - 85,310 -
Retirements:
Preferred stock - - (23,404)
First mortgage bonds (1,625) (32,628) (51,300)
Pollution control bonds (10) (10) (25,885)
Other long-term debt (40,689) (9,299) (8,170)
Notes payable, net - (40,000) 9,000
Payment of preferred stock dividends (4,899) (4,899) (5,400)
Payment of common stock dividends (39,400) (34,100) (29,000)
Miscellaneous (568) (1,201) (5,683)
- - ----------------------------------------------------------------------------------------------------------------------------------
Net cash provided from (used for) financing activities (46,591) 23,173 22,473
- - ----------------------------------------------------------------------------------------------------------------------------------
Net Change in Cash and Cash Equivalents 11,324 439 (6,539)
Cash and Cash Equivalents at Beginning of Year 1,317 878 7,417
- - -----------------------------------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Year $ 12,641 $ 1,317 $ 878
==================================================================================================================================
Supplemental Cash Flow Information:
Cash paid during the year for --
Interest (net of amount capitalized) $23,308 $19,196 $15,697
Income taxes 36,908 31,115 29,009
- - ----------------------------------------------------------------------------------------------------------------------------------
( ) Denotes use of cash.
The accompanying notes are an integral part of these statements.
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
At December 31, 1995 and 1994
Mississippi Power Company 1995 Annual Report
- - --------------------------------------------------------------------------------------------------------------------------------
ASSETS 1995 1994
- - --------------------------------------------------------------------------------------------------------------------------------
(in thousands)
<S> <C> <C>
Utility Plant:
Plant in service, at original cost (Notes 1 and 6) $ 1,434,327 $ 1,385,032
Less accumulated provision for depreciation 499,308 477,098
- - --------------------------------------------------------------------------------------------------------------------------------
935,019 907,934
Construction work in progress 41,210 44,838
- - --------------------------------------------------------------------------------------------------------------------------------
Total 976,229 952,772
- - --------------------------------------------------------------------------------------------------------------------------------
Other Property and Investments 4,160 3,353
- - --------------------------------------------------------------------------------------------------------------------------------
Current Assets:
Cash and cash equivalents 12,641 1,317
Receivables-
Customer accounts receivable 30,761 27,865
Other accounts and notes receivable 9,438 6,599
Affiliated companies 9,213 6,058
Accumulated provision for uncollectible accounts (802) (670)
Fossil fuel stock, at average cost 15,666 16,885
Materials and supplies, at average cost 22,558 25,301
Current portion of deferred fuel charges (Note 5) 1,546 1,068
Current portion of accumulated deferred income taxes (Note 8) 5,180 5,410
Prepaid federal income taxes - 5,019
Prepayments 2,404 760
Vacation pay deferred 4,715 4,588
- - --------------------------------------------------------------------------------------------------------------------------------
Total 113,320 100,200
- - --------------------------------------------------------------------------------------------------------------------------------
Deferred Charges:
Debt expense and loss, being amortized 10,039 10,929
Deferred fuel charges (Note 5) - 9,000
Deferred charges related to income taxes (Note 8) 23,384 25,036
Deferred early retirement program costs (Note 2) 7,286 11,286
Miscellaneous 14,535 11,135
- - --------------------------------------------------------------------------------------------------------------------------------
Total 55,244 67,386
- - --------------------------------------------------------------------------------------------------------------------------------
Total Assets $ 1,148,953 $ 1,123,711
================================================================================================================================
The accompanying notes are an integral part of these statements.
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
At December 31, 1995 and 1994
Mississippi Power Company 1995 Annual Report
- - --------------------------------------------------------------------------------------------------------------------------------
CAPITALIZATION AND LIABILITIES 1995 1994
- - --------------------------------------------------------------------------------------------------------------------------------
(in thousands)
<S> <C> <C>
Capitalization (See accompanying statements):
Common stock equity $ 374,884 $ 361,753
Preferred stock 74,414 74,414
Long-term debt 288,820 306,522
- - --------------------------------------------------------------------------------------------------------------------------------
Total 738,118 742,689
- - --------------------------------------------------------------------------------------------------------------------------------
Current Liabilities:
Long-term debt due within one year (Note 10) 57,229 41,199
Accounts payable-
Affiliated companies 13,646 3,337
Other 37,129 31,144
Customer deposits 2,716 2,712
Taxes accrued-
Federal and state income 97 433
Other 31,816 31,224
Interest accrued 4,701 4,427
Miscellaneous 13,453 14,613
- - --------------------------------------------------------------------------------------------------------------------------------
Total 160,787 129,089
- - --------------------------------------------------------------------------------------------------------------------------------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes (Note 8) 129,711 129,505
Accumulated deferred investment tax credits 29,773 31,228
Deferred credits related to income taxes (Note 8) 43,266 45,832
Accumulated provision for property damage (Note 1) 12,018 10,905
Miscellaneous 35,280 34,463
- - --------------------------------------------------------------------------------------------------------------------------------
Total 250,048 251,933
- - --------------------------------------------------------------------------------------------------------------------------------
Commitments and Contingent Matters (Notes 2, 3, 4, and 5)
Total Capitalization and Liabilities $ 1,148,953 $ 1,123,711
================================================================================================================================
The accompanying notes are an integral part of these statements.
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CAPITALIZATION
At December 31, 1995 and 1994
Mississippi Power Company 1995 Annual Report
- - ---------------------------------------------------------------------------------------------------------------------------
1995 1994 1995 1994
- - ---------------------------------------------------------------------------------------------------------------------------
(in thousands) (percent of total)
<S> <C> <C> <C> <C>
Common Stock Equity:
Common stock, without par value --
Authorized -- 1,130,000 shares
Outstanding -- 1,121,000 shares in
1995 and 1994 $ 37,691 $ 37,691
Paid-in capital 179,362 179,362
Premium on preferred stock 372 372
Retained earnings (Note 11) 157,459 144,328
- - ---------------------------------------------------------------------------------------------------------------------------
Total common stock equity 374,884 361,753 50.8% 48.7%
- - ---------------------------------------------------------------------------------------------------------------------------
Cumulative Preferred Stock:
$100 par value --
Authorized -- 1,244,139 shares
Outstanding -- 744,139 shares in 1995
and 1994
4.40% 4,000 4,000
4.60% 2,010 2,010
4.72% 5,000 5,000
6.32% 15,000 15,000
6.65% 8,404 8,404
7.00% 5,000 5,000
7.25% 35,000 35,000
- - ---------------------------------------------------------------------------------------------------------------------------
Total (annual dividend requirement -- $4,899,000) 74,414 74,414 10.1 10.0
- - ---------------------------------------------------------------------------------------------------------------------------
Long-Term Debt:
First mortgage bonds --
Maturity Interest Rates
March 1, 1998 5 3/8% 35,000 35,000
August 1, 2000 6 5/8% 40,000 40,000
March 1, 2004 6.60% 35,000 35,000
May 1, 2021 9 1/4% 45,447 47,072
June 1, 2023 7.45% 35,000 35,000
December 1, 2025 6 7/8% 30,000 -
- - ---------------------------------------------------------------------------------------------------------------------------
Total first mortgage bonds 220,447 192,072
Pollution control obligations (Note 9) 73,745 63,155
Other long-term debt (Note 9) 55,000 95,689
Unamortized debt premium (discount), net (3,143) (3,195)
- - ---------------------------------------------------------------------------------------------------------------------------
Total long-term debt (annual interest
requirement--$23,135,000) 346,049 347,721
Less amount due within one year (Note 10) 57,229 41,199
- - ---------------------------------------------------------------------------------------------------------------------------
Long-term debt excluding amount due within one year 288,820 306,522 39.1 41.3
- - ---------------------------------------------------------------------------------------------------------------------------
Total Capitalization $ 738,118 $ 742,689 100.0% 100.0%
===========================================================================================================================
The accompanying notes are an integral part of these statements.
</TABLE>
II-198
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF RETAINED EARNINGS
For the Years Ended December 31, 1995, 1994, and 1993
Mississippi Power Company 1995 Annual Report
- - ----------------------------------------------------------------------------------------------------------------------------------
1995 1994 1993
- - ----------------------------------------------------------------------------------------------------------------------------------
(in thousands)
<S> <C> <C> <C>
Balance at Beginning of Period $ 144,328 $ 129,343 $ 118,429
Net income after dividends on preferred stock 52,531 49,157 42,436
Cash dividends on common stock (39,400) (34,100) (29,000)
Preferred stock transactions and other, net - (72) (2,522)
==================================================================================================================================
Balance at End of Period (Note 11) $ 157,459 $ 144,328 $ 129,343
==================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
STATEMENTS OF PAID-IN CAPITAL
For the Years Ended December 31, 1995, 1994, and 1993
- - ----------------------------------------------------------------------------------------------------------------------------------
1995 1994 1993
- - ----------------------------------------------------------------------------------------------------------------------------------
(in thousands)
<S> <C> <C> <C>
Balance at Beginning of Period $ 179,362 $ 154,362 $ 124,326
Contributions to capital by parent company - 25,000 30,036
==================================================================================================================================
Balance at End of Period $ 179,362 $ 179,362 $ 154,362
==================================================================================================================================
The accompanying notes are an integral part of these statements.
</TABLE>
II-199
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Mississippi Power Company 1995 Annual Report
1. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
General
Mississippi Power Company is a wholly owned subsidiary of The Southern Company,
which is the parent company of five operating companies, Southern Company
Services (SCS), Southern Communications Services (Southern Communications),
Southern Electric International (Southern Electric), Southern Nuclear Operating
Company (Southern Nuclear), and The Southern Development and Investment Group
(Southern Development), and other direct and indirect subsidiaries. The
operating companies (Alabama Power Company, Georgia Power Company, Gulf Power
Company, Mississippi Power Company, and Savannah Electric and Power Company)
provide electric service in four southeastern states. Contracts among the
companies--dealing with jointly owned generating facilities, interconnecting
transmission lines, and the exchange of electric power--are regulated by the
Federal Energy Regulatory Commission (FERC) or the Securities and Exchange
Commission. SCS provides, at cost, specialized services to The Southern Company
and to the subsidiary companies. Southern Communications provides digital
wireless communications services to the operating companies and also markets
these services to the public within the Southeast. Southern Electric designs,
builds, owns, and operates power production and delivery facilities and provides
a broad range of technical services to industrial companies and utilities in the
United States and a number of international markets. Southern Nuclear provides
services to The Southern Company's nuclear power plants. Southern Development
develops new business opportunities related to energy products and services.
The Southern Company is registered as a holding company under the Public
Utility Holding Company Act of 1935 (PUHCA). Both The Southern Company and its
subsidiaries are subject to the regulatory provisions of the PUHCA. Mississippi
Power is also subject to regulation by the FERC and the Mississippi Public
Service Commission (MPSC). The Company follows generally accepted accounting
principles and complies with the accounting policies and practices prescribed by
the respective commissions. The preparation of financial statements in
conformity with generally accepted accounting principles requires the use of
estimates and the actual results may differ from those estimates.
Certain prior years' data presented in the financial statements have been
reclassified to conform with current year presentation.
Regulatory Assets and Liabilities
Mississippi Power is subject to the provisions of Financial Accounting Standards
Board (FASB) Statement No. 71, Accounting for the Effects of Certain Types of
Regulation. Regulatory assets represent probable future revenues to the Company
associated with certain costs that are expected to be recovered from customers
through the ratemaking process. Regulatory liabilities represent probable future
reductions in revenues associated with amounts that are to be credited to
customers through the ratemaking process. Regulatory assets and (liabilities)
reflected in the Balance Sheets as of December 31 relate to: (in thousands)
1995 1994
-------------------------
Deferred income taxes $23,384 $25,036
Vacation pay 4,715 4,588
Work force reduction costs 7,286 11,286
Deferred fuel charges 1,546 10,068
Premium on reacquired debt 8,509 9,571
Deferred environmental costs 1,713 -
Property damage reserve (12,018) (10,905)
Deferred income tax credits (43,266) (45,832)
Other, net (2,658) (3,383)
================================================================
Total $(10,789) $ 429
================================================================
In the event that a portion of the Company's operations is no longer subject
to the provisions of Statement No. 71, the Company would be required to write
off the related regulatory assets and liabilities. In addition, the Company
would be required to determine any impairment to other assets, including plant,
and, if impaired, to write down the assets to their fair value.
Revenues
Mississippi Power accrues revenues for service rendered but unbilled at the end
of each fiscal period. The Company's retail and wholesale rates include
provisions to adjust billings for fluctuations in fuel and the energy component
of purchased power. Retail rates also include provisions to adjust billings for
II-200
<PAGE>
NOTES (continued)
Mississippi Power Company 1995 Annual Report
fluctuations in costs for ad valorem taxes and certain qualifying environmental
costs. Revenues are adjusted for differences between actual allowable amounts
and the amounts included in rates.
The Company has a diversified base of customers. No single customer or
industry comprises 10 percent or more of revenues. In 1995, uncollectible
accounts continued to average less than 1 percent of revenues.
Depreciation
Depreciation of the original cost of depreciable utility plant in service is
provided by using composite straight-line rates which approximated 3.2 percent
in 1995 and 1994, and 3.1 percent in 1993. When property subject to depreciation
is retired or otherwise disposed of in the normal course of business, its cost
- - -- together with the cost of removal, less salvage -- is charged to the
accumulated provision for depreciation. Minor items of property included in the
original cost of the plant are retired when the related property unit is
retired. Depreciation expense includes an amount for the expected cost of
removal of other facilities.
Income Taxes
Mississippi Power uses the liability method of accounting for deferred income
taxes and provides deferred income taxes for all significant income tax
temporary differences. Investment tax credits utilized are deferred and
amortized to income over the average lives of the related property.
Allowance for Funds Used During Construction (AFUDC)
AFUDC represents the estimated debt and equity costs of capital funds that are
necessary to finance the construction of new facilities. While cash is not
realized currently from such allowance, it increases the revenue requirement
over the service life of the plant through a higher rate base and higher
depreciation expense. The composite rates used to capitalize the cost of funds
devoted to construction were 8.0 percent in 1995, 6.9 percent in 1994, and 6.8
percent in 1993. AFUDC (net of income taxes), as a percent of net income after
dividends on preferred stock, was 1.2 percent in 1995, and 3.5 percent in 1994
and 1993.
Utility Plant
Utility plant is stated at original cost. This cost includes: materials; labor;
minor items of property; appropriate administrative and general costs;
payroll-related costs such as taxes, pensions, and other benefits; and the
estimated cost of funds used during construction. The cost of maintenance,
repairs, and replacement of minor items of property is charged to maintenance
expense except for the maintenance of coal cars and a portion of the railway
track maintenance, which are charged to fuel stock. The cost of replacements of
property (exclusive of minor items of property) is charged to utility plant.
Cash and Cash Equivalents
For purposes of the Statements of Cash Flows, temporary cash investments are
considered cash equivalents. Temporary cash investments are securities with
original maturities of 90 days or less.
Financial Instruments
In accordance with FASB Statement No. 107, Disclosure About Fair Value of
Financial Instruments, all financial instruments of the Company for which the
carrying amount does not approximate fair value, must be disclosed. At December
31, 1995, the fair value of long-term debt was $355 million and the carrying
amount was $346 million. At December 31, 1994, the fair value of long-term debt
was $331 million and the carrying amount was $348 million. The fair value for
long-term debt was based on either closing market price or closing price of
comparable instruments.
Materials and Supplies
Generally, materials and supplies include the cost of transmission, distribution
and generating plant materials. Materials are charged to inventory when
purchased and then expensed or capitalized to plant, as appropriate, when used
or installed.
II-201
<PAGE>
NOTES (continued)
Mississippi Power Company 1995 Annual Report
Provision for Property Damage
Mississippi Power is self-insured for the cost of storm, fire and other
uninsured casualty damage to its property, including transmission and
distribution facilities. As permitted by regulatory authorities, the Company
provided for such costs by charges to income of $1.5 million in 1995, $1.1
million in 1994 and $1.5 million in 1993. The cost of repairing damage resulting
from such events that individually exceed $50 thousand is charged to the
accumulated provision to the extent it is available. Effective January 1995,
regulatory treatment by the MPSC allowed a maximum accumulated provision of $18
million. As of December 31, 1995, the accumulated provision amounted to $12.0
million.
2. RETIREMENT BENEFITS
Pension Plan
Mississippi Power has a defined benefit, trusteed, non-contributory pension plan
that covers substantially all regular employees. Benefits are based on one of
the following formulas: years of service and final average pay or years of
service and a flat-dollar benefit. The Company uses the "entry age normal method
with a frozen initial liability" actuarial method for funding purposes, subject
to limitations under federal income tax regulations. Amounts funded to the
pension trust are primarily invested in equity and fixed-income securities. FASB
Statement No. 87, Employers' Accounting for Pensions, requires use of the
"projected unit credit" actuarial method for financial reporting purposes.
Postretirement Benefits
Mississippi Power also 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 required by the
Company's regulatory commissions. Amounts funded are primarily invested in debt
and equity securities.
FASB Statement No. 106, Employers' Accounting for Postretirement Benefits
Other Than Pensions, requires that medical care and life insurance benefits for
retired employees be accounted for on an accrual basis using a specified
actuarial method, "benefit/years-of-service." The cost of postretirement
benefits is reflected in rates on a current basis.
Funded Status and Cost of Benefits
The following tables show actuarial results and assumptions for pension and
postretirement benefits as computed under the requirements of FASB Statement
Nos. 87 and 106, respectively. The funded status of the plans at December 31 was
as follows:
Pension
------------------------
1995 1994
------------------------
(in thousands)
Actuarial present value of benefit
obligation:
Vested benefits $91,322 $80,603
Non-vested benefits 4,264 2,966
--------------------------------------------------------------
Accumulated benefit obligation 95,586 83,569
Additional amounts related to
projected salary increases 28,545 27,292
--------------------------------------------------------------
Projected benefit obligation 124,131 110,861
Less:
Fair value of plan assets 170,481 145,598
Unrecognized net gain (47,034) (37,485)
Unrecognized prior service cost 2,868 3,109
Unrecognized transition asset (6,001) (6,635)
--------------------------------------------------------------
Prepaid asset (accrued liability)
recognized in the
Balance Sheets $(3,817) $(6,274)
==============================================================
Postretirement Benefits
------------------------
1995 1994
------------------------
(in thousands)
Actuarial present value of benefit
obligation:
Retirees and dependents $22,575 $22,833
Employees eligible to retire 1,709 774
Other employees 17,908 22,851
------------------------------------------------------------
Accumulated benefit obligation 42,192 46,458
Less:
Fair value of plan assets 8,700 6,608
Unrecognized net loss (gain) 4,160 1,751
Unrecognized transition
obligation 7,044 18,668
------------------------------------------------------------
Accrued liability recognized in
the Balance Sheets $22,288 $19,431
============================================================
II-202
<PAGE>
NOTES (continued)
Mississippi Power Company 1995 Annual Report
In 1995, The Southern Company's subsidiaries announced a cost sharing
program for postretirement benefits. The program establishes limits on amounts
the companies will pay to provide future retiree postretirement benefits. This
change reduced the Company's 1995 accumulated postretirement benefit obligation
by approximately $10.5 million.
The weighted average rates assumed in the above actuarial calculations were:
1995 1994 1993
---------------------------------
Discount 7.3% 8.0% 7.5%
Annual salary increase 4.8 5.5 5.0
Long-term return on
plan assets 8.5 8.5 8.5
------------------------------------------------------------
An additional assumption used in measuring the accumulated postretirement
benefit obligation was a weighted average medical care cost trend rate of 9.8
percent for 1995, decreasing gradually to 5.3 percent through the year 2005 and
remaining at that level thereafter. An annual increase in the assumed medical
care cost trend rate of 1 percent would increase the accumulated benefit
obligation as of December 31, 1995, by $3.3 million and the aggregate of the
service and interest cost components of the net retiree cost by $0.8 million.
Components of the plans' net cost are shown below:
Pension
--------------------------------
1995 1994 1993
--------------------------------
(in thousands)
Benefits earned during
the year $ 3,636 $ 3,780 $ 3,792
Interest cost on
projected benefit
obligation 8,434 7,503 7,296
Actual (return) loss on
plan assets (32,232) 3,244 (20,017)
Net amortization and
deferral 18,650 (16,048) 8,741
==============================================================
Net pension income $ (1,512) $ (1,521) $ (188)
==============================================================
Of the above net pension income, $(1.1) million in both 1995 and 1994, and
$(170) thousand in 1993 were recorded in operating expenses, and the remainder
was recorded in construction and other accounts.
Postretirement Benefits
---------------------------------
1995 1994 1993
---------------------------------
(in thousands)
Benefits earned during the year $1,525 $1,760 $1,448
Interest cost on accumulated
benefit obligation 3,442 3,251 2,811
Amortization of transition
obligation over 20 years 1,027 1,043 1,051
Actual (return) loss on
plan assets (1,436) 132 (814)
Net amortization and deferral 851 (575) 343
==================================================================
Net postretirement costs $5,409 $5,611 $4,839
==================================================================
Of the above net postretirement costs recorded, $3.9 million in 1995, $4.4
million in 1994, and $3.9 million in 1993 were charged to operating expense.
Work Force Reduction Programs
During 1994, Mississippi Power and SCS instituted work force reduction programs.
The costs of the SCS work force reduction program were apportioned among the
various entities that form the Southern electric system, with the Company's
portion amounting to $1.4 million. The Company instituted an early retirement
incentive program in April 1994 and deferred the related costs of approximately
$12.9 million. The Company received authority from the MPSC to defer these
costs, as well as its portion of the costs of the SCS program, and to amortize
over a period not to exceed 60 months, beginning no later than January 1995. The
Company expensed $4.0 million and $3.0 million of the cost of these programs in
1995 and 1994, respectively.
3. LITIGATION AND REGULATORY MATTERS
Retail Rate Adjustment Plans
Mississippi Power's retail base rates are set under a Performance Evaluation
Plan (PEP). In January 1994, the MPSC approved PEP-2. PEP-2 was designed with
the MPSC objectives that the plan would reduce the impact of rate changes on the
customer and provide incentives for Mississippi Power to keep customer prices
low. PEP-2 includes a mechanism for sharing rate adjustments based on the
Company's ability to maintain low rates for customers and on the Company's
performance as measured by three indicators that emphasize price and service to
the customer. PEP-2 provides for semiannual evaluations of Mississippi's
II-203
<PAGE>
NOTES (continued)
Mississippi Power Company 1995 Annual Report
performance-based return on investment. Any change in rates is limited to 2
percent of retail revenues per evaluation period. PEP-2 will remain in effect
until the MPSC modifies or terminates the plan. During 1995 and 1994, there were
no increases under PEP-2.
FERC Reviews Equity Returns
In May 1991, the FERC ordered that hearings be conducted concerning the
reasonableness of the operating companies' wholesale rate schedules and
contracts that have a return on equity of 13.75 percent or greater. The
contracts that could be affected by the hearings include substantially all of
the transmission, unit power, long-term power and other similar contracts,
including the Company's Transmission Facilities Agreement (TFA) discussed in
Note 5 under "Lease Agreements." Any change in the rate of return on common
equity that may require refunds as a result of this proceeding would be
substantially for the period beginning in July 1991 and ending in October 1992.
In August 1992, a FERC administrative law judge issued an opinion that
changes in rate schedules and contracts were not necessary and that the FERC
staff failed to show how any changes were in the public interest. The FERC staff
has filed exceptions to the administrative law judge's opinion, and the matter
remains pending before the FERC.
In August 1994, the FERC instituted another proceeding based on
substantially the same issues as in the 1991 proceeding. The second period under
review for possible refunds was from October 1994 through December 1995. In
November 1995, a FERC administrative law judge issued an opinion that the FERC
staff failed to meet its burden of proof, and therefore, no change in the equity
return was necessary. The FERC staff has filed exceptions to the administrative
law judge's opinion, and the matter remains pending before the FERC.
If the rates of return on common equity recommended by the FERC staff were
applied to all of the schedules and contracts involved in both proceedings and
refunds were ordered, the amount of refunds could range up to approximately $2.0
million at December 31, 1995. However, management believes that rates are not
excessive, and that refunds are not justified.
Environmental Compliance Overview Plan
The MPSC approved Mississippi Power's ECO Plan in 1992. The plan establishes
procedures to facilitate the MPSC's overview of the Company's environmental
strategy and provides for recovery of costs associated with environmental
projects approved by the MPSC. In November 1995, the MPSC ordered a change in
accounting treatment allowing emission allowance expenses to be recovered
through the Company's fuel adjustment clause, and emission allowance inventory
costs to be recovered through PEP-2 rather than through the ECO Plan. Under the
ECO Plan any increase in the annual revenue requirement is limited to 2 percent
of retail revenues. However, the plan also provides for carryover of any amount
over the 2 percent limit into the next year's revenue requirement. The ECO Plan
has resulted in annual retail rate increases, the latest being an increase of
$3.7 million, effective in May 1995 which included $1.6 million of 1994
carryover. On January 29, 1996, the Company filed the ECO Plan with the MPSC
requesting an annual retail rate decrease of $3.0 million.
Mississippi Power conducts studies, when possible, to determine the extent
of any required clean-up costs. Should remediation be determined to be probable,
reasonable estimates of costs to clean up such sites are developed and
recognized in the financial statements. A currently owned site where
manufactured gas plant operations were located prior to the Company's ownership
was investigated for potential remediation. The remedial investigation has been
concluded and is pending approval by the Mississippi Department of Environmental
Quality. In recognition of probable further study and remediation, the Company
in 1995 recorded a liability and a deferred debit (regulatory asset) of $1.8
million, including feasibility study costs. The Company recognizes such costs as
they are incurred and recovers them under the ECO Plan as provided in the
Company's 1995 ECO order. If this site were required to be remediated, industry
studies show the Company could incur cleanup costs ranging from $1.5 million to
$10 million before giving consideration to possible recovery of clean-up costs
from other parties.
4. CONSTRUCTION PROGRAM
Mississippi Power is engaged in continuous construction programs, the costs of
which are currently estimated to total some $67 million in 1996, $62 million in
1997, and $53 million in 1998. These estimates include AFUDC of $1.3 million in
II-204
<PAGE>
NOTES (continued)
Mississippi Power Company 1995 Annual Report
1996, and $0.3 million in both 1997 and 1998.
The construction program is subject to periodic review and revision, and
actual construction costs may vary from the above estimates because of numerous
factors. These factors include changes in business conditions; revised load
growth estimates; changes in environmental regulations; increasing costs of
labor, equipment and materials; and cost of capital. The Company does not have
any new generating plants under construction. However, significant construction
will continue related to transmission and distribution facilities and the
upgrading and extension of the useful lives of generating plants.
5. FINANCING AND COMMITMENTS
Financing
Mississippi Power's construction program is expected to be financed from
internal and other sources, such as the issuance of additional long-term debt
and preferred stock and the receipt of capital contributions from The Southern
Company.
The amounts of first mortgage bonds and preferred stock which can be issued
in the future will be contingent upon market conditions, adequate earnings
levels, regulatory authorizations and other factors.
At December 31, 1995, Mississippi Power had unused committed credit
agreements with banks for $27 million. Additionally, Mississippi Power had $70
million of unused committed credit agreements in the form of revolving credit
agreements expiring at various dates during 1996 and in 1998. The agreements
expiring December 1, 1998, for $40 million allow short-term borrowings to be
converted into term loans, payable in 12 equal quarterly installments, with the
first installment due at the end of the first calendar quarter after the
applicable termination date or at an earlier date at the Company's option. In
connection with these credit arrangements, the Company agrees to pay commitment
fees based on the unused portions of the commitments or to maintain compensating
balances with the banks. The Company had no short-term borrowings outstanding at
year-end 1995.
Assets Subject to Lien
Mississippi Power's mortgage indenture dated as of September 1, 1941, as amended
and supplemented, which secures the first mortgage bonds issued by the Company,
constitutes a direct first lien on substantially all the Company's fixed
property and franchises.
Lease Agreements
In 1984, Mississippi Power and Gulf States Utilities Company (Gulf States)
entered into a forty-year transmission facilities agreement whereby Gulf States
began paying a use fee to the Company covering all expenses relative to
ownership and operation and maintenance of a 500 kV line, including amortization
of its original $57 million cost. For the three years ended 1995 use fees
collected under this agreement, net of related expenses, amounted to $3.8
million each year, and are included with other income, net, in the Statements of
Income. For more information see Note 3 under "FERC Reviews Equity Returns."
In 1989, Mississippi Power entered into a twenty-two
year lease agreement for the use of 495 aluminum railcars. In 1994, a second
lease agreement for the use of 250 additional aluminum railcars was also entered
into for twenty-two years. Both of these leases, totaling 745 railcars, were for
the transport of coal at Plant Daniel. Gulf Power, as joint owner of Plant
Daniel, is responsible for one half of the lease cost. The Company's share (50%)
of the leases is charged to fuel inventory and allocated to fuel expense as the
fuel is consumed. The lease cost charged to inventory was $1.7 million in 1995
and $1.2 million in both 1994 and 1993. The Company's annual lease payments for
1996 through 2000 will be approximately $1.7 million and after 2000, lease
payments total approximately $22.4 million. The Company has the option to
purchase the 745 railcars at the greater of the termination value or the fair
market value, or to renew the leases at the end of the lease term.
Fuel Commitments
To supply a portion of the fuel requirements of its generating plants,
Mississippi Power has entered into various long-term commitments for the
procurement of fuel. In most cases, these contracts contain provisions for price
escalations, minimum production levels, and other financial commitments. Total
estimated obligations were approximately $227 million at December 31, 1995.
II-205
<PAGE>
NOTES (continued)
Mississippi Power Company 1995 Annual Report
Additional commitments for fuel will be required in the future to supply the
Company's fuel needs.
In order to take advantage of lower cost coal supplies, agreements were
reached in 1986 to terminate two contracts for the supply of coal to Plant
Daniel, which is jointly owned by Mississippi Power and Gulf Power, an operating
affiliate. The Company's portion of this payment was about $60 million. In
accordance with the ratemaking treatment, the cost to terminate the contracts is
being amortized to match costs with the savings achieved. The remaining
unamortized amount of Mississippi Power's share of payments to the suppliers
totaled $1.5 million at December 31, 1995.
6. JOINT OWNERSHIP AGREEMENTS
Mississippi Power and Alabama Power own as tenants in common Greene County
Electric Generating Plant (coal) located in Alabama; and Mississippi Power and
Gulf Power own as tenants in common Daniel Electric Generating Plant (coal)
located in Mississippi. At December 31, 1995, Mississippi Power's percentage
ownership and investment in these jointly owned facilities were as follows:
Company's
Generating Total Percent Gross Accumulated
Plant Capacity Ownership Investment Depreciation
---------------------------------------------------------------
(Megawatts) (in thousands)
Greene
County 500 40% $ 57,957 $ 31,201
Daniel 1,000 50% 222,367 94,172
---------------------------------------------------------------
Mississippi Power's share of plant operating expenses is included in the
corresponding operating expenses in the Statements of Income.
7. LONG-TERM POWER SALES AGREEMENTS
General
Mississippi Power and the other operating affiliates of The Southern Company
have long-term contractual agreements for the sale of capacity and energy to
certain non-affiliated utilities located outside the system's service area. The
agreements for non-firm capacity expired in 1994. Some of these agreements (unit
power sales) are firm commitments and pertain to capacity related to specific
generating units. Mississippi Power's participation in firm production capacity
unit power sales ended in 1989. However, the Company continues to participate in
transmission and energy sales under the unit power sales agreements. Because the
energy is generally sold at variable costs under these agreements, only revenues
from capacity sales affect profitability. Off-system capacity revenues for the
Company have been as follows:
Other
Year Unit Power Long-Term Total
------------------------------------------------------------
(in thousands)
1995 $ 268 $ - $ 268
1994 660 1,305 1,965
1993 1,571 2,620 4,191
In 1994, long-term non-firm power of 200 megawatts
was sold by the Southern electric system to Florida Power Corporation (FPC)
until the contract expired at year-end.
8. INCOME TAXES
Effective January 1, 1993, Mississippi Power adopted FASB Statement No. 109,
Accounting for Income Taxes. The adoption resulted in the recording of
additional deferred income taxes and related regulatory assets and liabilities.
At December 31, 1995, the tax-related regulatory assets to be recovered from
customers were $23 million. These assets are attributable to tax benefits flowed
through to customers in prior years and to taxes applicable to capitalized
AFUDC. At December 31, 1995, the tax-related regulatory liabilities to be
refunded to customers were $43 million. These liabilities are attributable to
deferred taxes previously recognized at rates higher than current enacted tax
law and unamortized investment tax credits.
II-206
<PAGE>
NOTES (continued)
Mississippi Power Company 1995 Annual Report
Details of the federal and state income tax provisions are shown below:
1995 1994 1993
---------------------------------
(in thousands)
Total provision for
income taxes
Federal --
Currently payable $32,546 $26,072 $15,842
Deferred --current year 5,122 6,313 5,158
--reversal of
prior years (7,039) (5,161) (820)
---------------------------------------------------------------
30,629 27,224 20,180
---------------------------------------------------------------
State --
Currently payable 3,426 3,978 2,945
Deferred --current 2,270 1,669 1,339
--reversal of
prior years (833) (1,258) (638)
--------------------------------------------------------------
4,863 4,389 3,646
---------------------------------------------------------------
Total 35,492 31,613 23,826
Less income taxes charged
to other income 1,006 227 1,158
---------------------------------------------------------------
Federal and state
income taxes charged
to operations $34,486 $31,386 $22,668
===============================================================
The tax effects of temporary differences between the carrying amounts of
assets and liabilities in the financial statements and their respective tax
bases, which give rise to deferred tax assets and liabilities are as follows:
1995 1994
-----------------------------
(in thousands)
Deferred tax liabilities:
Accelerated depreciation $145,093 $138,281
Basis differences 10,815 11,645
Coal contract buyouts 145 3,851
Other 16,478 17,908
-------------------------------------------------------------
Total 172,531 171,685
-------------------------------------------------------------
Deferred tax assets:
Other property
basis differences 25,951 27,375
Pension and
other benefits 7,356 5,386
Property insurance 4,551 4,171
Unbilled fuel 3,039 3,649
Other 7,103 7,009
-------------------------------------------------------------
Total 48,000 47,590
-------------------------------------------------------------
Net deferred tax
liabilities 124,531 124,095
Portion included in
current assets, net 5,180 5,410
-------------------------------------------------------------
Accumulated deferred
income taxes in the
Balance Sheets $129,711 $129,505
=============================================================
In 1989, under order of the MPSC, Mississippi Power began amortizing
deferred income taxes not covered by the Internal Revenue Service normalization
requirements, that had been recorded at rates higher than those specified by the
current statutory income tax rules. This amortization occurred over a 60-month
period, the effect of which was a reduction of income tax expense of
approximately $2.7 million per year. This tax rate differential has been fully
amortized.
Deferred investment tax credits are amortized over the life of the related
property with such amortization normally applied as a credit to reduce
depreciation in the Statements of Income. Credits amortized in this manner
amounted to $1.5 million in 1995, 1994 and 1993. At December 31, 1995, all
investment tax credits available to reduce federal income taxes payable had been
utilized.
II-207
<PAGE>
NOTES (continued)
Mississippi Power Company 1995 Annual Report
A reconciliation of the federal statutory income tax rate to the effective
income tax rate is as follows:
1995 1994 1993
-----------------------------
Total effective tax rate 38% 37% 33%
State income tax, net of
federal income tax benefit (3) (3)% (3)
Tax rate differential - 1 4
Other - - 1
-------------------------------------------------------------
Statutory federal tax rate 35% 35% 35%
=============================================================
Mississippi Power and the subsidiaries of The Southern Company file a
consolidated federal income tax return. Under a joint consolidated income tax
agreement, each subsidiary's current and deferred tax expense is computed on a
stand-alone basis. Tax benefits from losses of the parent company are allocated
to each subsidiary based on the ratio of taxable income to total consolidated
taxable income.
9. OTHER LONG-TERM DEBT
Details of other long-term debt are as follows:
December 31,
1995 1994
---------------------
(in thousands)
Obligations incurred in
connection with the sale by
public authorities of
tax-exempt pollution control
revenue bonds:
5.8$% due 2007 $ 970 $ 980
Variable rate due 2020 6,550 6,550
Variable rate due 2022 16,750 16,750
6.20% due 2023 13,000 13,000
5.65% due 2023 25,875 25,875
Variable due 2025 10,600 -
------------------------------------------------------------
73,745 63,155
------------------------------------------------------------
Notes payable:
4.15% to 7.50% due 1995 - 40,689
Variable rates (5.88% to 5.89%
at 1/1/95) due 1995 - 20,000
Variable rates (5.85% to
6.015% at 1/1/96) due 1996 55,000 35,000
------------------------------------------------------------
55,000 95,689
------------------------------------------------------------
Total $128,745 $158,844
============================================================
Pollution control obligations represent installment or
lease purchases of pollution control facilities financed by application of funds
derived from sales by public authorities of tax-exempt revenue bonds.
Mississippi Power has authenticated and delivered to the Trustee a like
principal amount of first mortgage bonds as security for obligations under
collateralized installment agreements. The principal and interest on the first
mortgage bonds will be payable only in the event of default under these
agreements. The 5.8% Series of pollution control obligations has a cash sinking
fund requirement of $10 thousand annually through 1997 and $20 thousand annually
in 1998, 1999 and 2000. The $55 million in notes payable is all due in 1996.
10. LONG-TERM DEBT DUE WITHIN ONE YEAR
A summary of the improvement fund requirements and scheduled maturities and
redemptions of long-term debt due within one year is as follows:
1995 1994
--------------------
(in thousands)
Bond improvement
fund requirements $ 2,219 $ 1,931
Less:
Portion to be satisfied by
certifying property additions - 1,431
-------------------------------------------------------------
Cash improvement fund
requirements 2,219 500
Pollution control bond cash
sinking fund requirements (Note 9) 10 10
Current portion of notes
payable (Note 9) 55,000 40,689
=============================================================
Total $57,229 $41,199
=============================================================
The first mortgage bond improvement fund requirement is one percent of each
outstanding series authenticated under the indenture of Mississippi Power prior
to January 1 of each year, other than first mortgage bonds issued as collateral
security for certain pollution control obligations. The requirement must be
satisfied by June 1 of each year by depositing cash or reacquiring bonds, or by
pledging additional property equal to 166-2/3 percent of such requirement.
11. COMMON STOCK DIVIDEND RESTRICTIONS
Mississippi Power's first mortgage bond indenture and the corporate charter
contain various common stock dividend restrictions. At December 31, 1995, some
$118 million of retained earnings was restricted against the payment of cash
dividends on common stock under the most restrictive terms of the mortgage
indenture or corporate charter.
II-208
<PAGE>
NOTES (continued)
Mississippi Power Company 1995 Annual Report
12. QUARTERLY FINANCIAL DATA (UNAUDITED)
Summarized quarterly financial data for 1995 and 1994 are as follows:
Net Income
After Dividends
Quarter Operating Operating On
Ended Revenues Income Preferred Stock
-------------------------------------------------------------------
March 1995 $109,572 $15,729 $ 9,269
June 1995 128,504 22,193 14,737
September 1995 157,119 28,517 22,161
December 1995 121,358 12,171 6,364
March 1994 $114,134 $12,910 $ 8,266
June 1994 131,792 19,891 13,744
September 1994 142,340 26,212 21,357
December 1994 110,896 14,062 5,790
Mississippi Power's business is influenced by seasonal weather conditions
and the timing of rate changes.
II-209
<PAGE>
<TABLE>
<CAPTION>
SELECTED FINANCIAL AND OPERATING DATA
Mississippi Power Company 1995 Annual Report
- - -------------------------------------------------------------------------------------------------------------------------
1995 1994 1993
- - -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating Revenues (in thousands) $516,553 $499,162 $474,883
Net Income after Dividends
on Preferred Stock (in thousands) $52,531 $49,157 $42,436
Cash Dividends on Common Stock (in thousands) $39,400 $34,100 $29,000
Return on Average Common Equity (percent) 14.26 14.38 14.09
Total Assets (in thousands) $1,148,953 $1,123,711 $1,050,334
Gross Property Additions (in thousands) $67,570 $104,014 $139,976
- - -------------------------------------------------------------------------------------------------------------------------
Capitalization (in thousands):
Common stock equity $374,884 $361,753 $321,768
Preferred stock 74,414 74,414 74,414
Preferred stock subject to mandatory redemption - - -
Long-term debt 288,820 306,522 250,391
- - -------------------------------------------------------------------------------------------------------------------------
Total (excluding amounts due within one year) $738,118 $742,689 $646,573
=========================================================================================================================
Capitalization Ratios (percent):
Common stock equity 50.8 48.7 49.8
Preferred stock 10.1 10.0 11.5
Long-term debt 39.1 41.3 38.7
- - -------------------------------------------------------------------------------------------------------------------------
Total (excluding amounts due within one year) 100.0 100.0 100.0
=========================================================================================================================
First Mortgage Bonds (in thousands):
Issued 30,000 35,000 70,000
Retired 1,625 32,628 51,300
Preferred Stock (in thousands):
Issued - - 23,404
Retired - - 23,404
- - -------------------------------------------------------------------------------------------------------------------------
Security Ratings:
First Mortgage Bonds -
Moody's Aa3 Aa3 A1
Standard and Poor's A+ A+ A+
Duff & Phelps AA- A+ A+
Preferred Stock -
Moody's a1 a1 a1
Standard and Poor's A A A
Duff & Phelps A+ A A
- - -------------------------------------------------------------------------------------------------------------------------
Customers (year-end):
Residential 154,014 152,891 151,692
Commercial 29,903 29,276 28,648
Industrial 642 650 570
Other 194 189 190
- - -------------------------------------------------------------------------------------------------------------------------
Total 184,753 183,006 181,100
=========================================================================================================================
Employees (year-end) 1,421 1,535 1,586
- - -------------------------------------------------------------------------------------------------------------------------
</TABLE>
II-210
<PAGE>
<TABLE>
<CAPTION>
SELECTED FINANCIAL AND OPERATING DATA
Mississippi Power Company 1995 Annual Report
- - -------------------------------------------------------------------------------------------------------------------------
1992 1991 1990
- - -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating Revenues (in thousands) $434,447 $432,386 $446,871
Net Income after Dividends
on Preferred Stock (in thousands) $36,790 $22,627 $34,176
Cash Dividends on Common Stock (in thousands) $28,000 $28,500 $27,500
Return on Average Common Equity (percent) 13.27 8.17 12.36
Total Assets (in thousands) $791,283 $790,641 $800,026
Gross Property Additions (in thousands) $68,189 $53,675 $49,009
- - -------------------------------------------------------------------------------------------------------------------------
Capitalization (in thousands):
Common stock equity $280,640 $273,855 $279,833
Preferred stock 74,414 39,414 39,414
Preferred stock subject to mandatory redemption - - 3,750
Long-term debt 238,650 304,150 270,724
- - -------------------------------------------------------------------------------------------------------------------------
Total (excluding amounts due within one year) $593,704 $617,419 $593,721
=========================================================================================================================
Capitalization Ratios (percent):
Common stock equity 47.3 44.4 47.1
Preferred stock 12.5 6.4 7.3
Long-term debt 40.2 49.2 45.6
- - -------------------------------------------------------------------------------------------------------------------------
Total (excluding amounts due within one year) 100.0 100.0 100.0
=========================================================================================================================
First Mortgage Bonds (in thousands):
Issued 40,000 50,000 -
Retired 104,703 - 4,000
Preferred Stock (in thousands):
Issued 35,000 - -
Retired - 4,118 750
- - -------------------------------------------------------------------------------------------------------------------------
Security Ratings:
First Mortgage Bonds -
Moody's A1 A1 A1
Standard and Poor's A+ A+ A+
Duff & Phelps A+ A+ A+
Preferred Stock -
Moody's a1 a1 a1
Standard and Poor's A A A
Duff & Phelps A A A
- - -------------------------------------------------------------------------------------------------------------------------
Customers (year-end):
Residential 150,248 148,978 147,738
Commercial 28,056 27,441 27,134
Industrial 573 562 574
Other 189 400 411
- - -------------------------------------------------------------------------------------------------------------------------
Total 179,066 177,381 175,857
=========================================================================================================================
Employees (year-end) 1,619 1,630 1,842
- - -------------------------------------------------------------------------------------------------------------------------
</TABLE>
II-211A
<PAGE>
<TABLE>
<CAPTION>
SELECTED FINANCIAL AND OPERATING DATA
Mississippi Power Company 1995 Annual Report
- - -------------------------------------------------------------------------------------------------------------------------
1989 1988 1987
- - -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating Revenues (in thousands) $442,650 $437,939 $455,843
Net Income after Dividends
on Preferred Stock (in thousands) $38,576 $36,081 $35,200
Cash Dividends on Common Stock (in thousands) $27,000 $27,600 $24,700
Return on Average Common Equity (percent) 14.43 14.03 14.68
Total Assets (in thousands) $786,570 $779,319 $764,068
Gross Property Additions (in thousands) $43,916 $54,550 $53,288
- - -------------------------------------------------------------------------------------------------------------------------
Capitalization (in thousands):
Common stock equity $273,157 $261,473 $252,992
Preferred stock 39,414 39,414 39,414
Preferred stock subject to mandatory redemption 4,500 5,250 6,750
Long-term debt 277,693 287,525 294,811
- - -------------------------------------------------------------------------------------------------------------------------
Total (excluding amounts due within one year) $594,764 $593,662 $593,967
=========================================================================================================================
Capitalization Ratios (percent):
Common stock equity 45.9 44.1 42.6
Preferred stock 7.4 7.5 7.8
Long-term debt 46.7 48.4 49.6
- - -------------------------------------------------------------------------------------------------------------------------
Total (excluding amounts due within one year) 100.0 100.0 100.0
=========================================================================================================================
First Mortgage Bonds (in thousands):
Issued - - -
Retired 3,823 - 29,701
Preferred Stock (in thousands):
Issued - - -
Retired 750 1,500 1,500
- - -------------------------------------------------------------------------------------------------------------------------
Security Ratings:
First Mortgage Bonds -
Moody's A1 A1 A1
Standard and Poor's A+ A+ A+
Duff & Phelps A+ 5 5
Preferred Stock -
Moody's a1 a1 a1
Standard and Poor's A A A
Duff & Phelps A 6 6
- - -------------------------------------------------------------------------------------------------------------------------
Customers (year-end):
Residential 147,308 146,750 146,273
Commercial 26,867 26,751 26,342
Industrial 525 478 438
Other 404 399 389
- - -------------------------------------------------------------------------------------------------------------------------
Total 175,104 174,378 173,442
=========================================================================================================================
Employees (year-end) 1,750 1,831 1,898
- - -------------------------------------------------------------------------------------------------------------------------
</TABLE>
II-211B
<PAGE>
<TABLE>
<CAPTION>
SELECTED FINANCIAL AND OPERATING DATA
Mississippi Power Company 1995 Annual Report
- - ---------------------------------------------------------------------------------------------------------
1986 1985
- - ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operating Revenues (in thousands) $476,265 $475,610
Net Income after Dividends
on Preferred Stock (in thousands) $33,814 $33,330
Cash Dividends on Common Stock (in thousands) $23,700 $22,600
Return on Average Common Equity (percent) 15.28 15.83
Total Assets (in thousands) $767,110 $679,577
Gross Property Additions (in thousands) $62,488 $57,791
- - ---------------------------------------------------------------------------------------------------------
Capitalization (in thousands):
Common stock equity $226,601 $216,087
Preferred stock 39,414 39,414
Preferred stock subject to mandatory redemption 8,250 9,750
Long-term debt 299,684 261,594
- - ---------------------------------------------------------------------------------------------------------
Total (excluding amounts due within one year) $573,949 $526,845
=========================================================================================================
Capitalization Ratios (percent):
Common stock equity 39.5 41.0
Preferred stock 8.3 9.3
Long-term debt 52.2 49.7
- - ---------------------------------------------------------------------------------------------------------
Total (excluding amounts due within one year) 100.0 100.0
=========================================================================================================
First Mortgage Bonds (in thousands):
Issued 35,000 -
Retired 29,250 250
Preferred Stock (in thousands):
Issued - -
Retired 1,500 1,111
- - ---------------------------------------------------------------------------------------------------------
Security Ratings:
First Mortgage Bonds -
Moody's A1 A1
Standard and Poor's A+ A
Duff & Phelps 5 5
Preferred Stock -
Moody's a1 a1
Standard and Poor's A A
Duff & Phelps 6 6
- - ---------------------------------------------------------------------------------------------------------
Customers (year-end):
Residential 145,809 145,071
Commercial 26,217 25,629
Industrial 393 371
Other 363 356
- - ---------------------------------------------------------------------------------------------------------
Total 172,782 171,427
=========================================================================================================
Employees (year-end) 1,882 1,801
- - ---------------------------------------------------------------------------------------------------------
</TABLE>
II-211C
<PAGE>
<TABLE>
<CAPTION>
SELECTED FINANCIAL AND OPERATING DATA (continued)
Mississippi Power Company 1995 Annual Report
- - -------------------------------------------------------------------------------------------------------------------------
1995 1994 1993
- - -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating Revenues (in thousands):
Residential $134,286 $124,257 $118,793
Commercial 131,034 124,716 115,152
Industrial 140,947 142,268 130,198
Other 3,914 3,882 3,760
- - -------------------------------------------------------------------------------------------------------------------------
Total retail 410,181 395,123 367,903
Sales for resale - non-affiliates 91,820 88,122 83,511
Sales for resale - affiliates 7,691 9,538 15,519
- - -------------------------------------------------------------------------------------------------------------------------
Total revenues from sales of electricity 509,692 492,783 466,933
Other revenues 6,861 6,379 7,950
- - -------------------------------------------------------------------------------------------------------------------------
Total $516,553 $499,162 $474,883
=========================================================================================================================
Kilowatt-Hour Sales (in thousands):
Residential 2,040,608 1,922,217 1,929,835
Commercial 2,242,163 2,100,625 1,933,685
Industrial 3,813,456 3,847,011 3,623,543
Other 38,559 38,147 38,357
- - -------------------------------------------------------------------------------------------------------------------------
Total retail 8,134,786 7,908,000 7,525,420
Sales for resale - non-affiliates 2,493,519 2,555,914 2,544,982
Sales for resale - affiliates 243,554 174,342 426,919
- - -------------------------------------------------------------------------------------------------------------------------
Total 10,871,859 10,638,256 10,497,321
=========================================================================================================================
Average Revenue Per Kilowatt-Hour (cents):
Residential 6.58 6.46 6.16
Commercial 5.84 5.94 5.96
Industrial 3.70 3.70 3.59
Total retail 5.04 5.00 4.89
Total sales 4.69 4.63 4.45
Residential Average Annual Kilowatt-Hour Use Per Customer 13,307 12,611 12,780
Residential Average Annual Revenue Per Customer $875.69 $815.21 $786.71
Plant Nameplate Capacity Ratings (year-end) (megawatts) 2,086 2,086 2,011
Maximum Peak-Hour Demand (megawatts):
Winter 1,637 1,636 1,401
Summer 2,095 1,874 1,872
Annual Load Factor (percent) 60.0 63.4 60.0
Plant Availability - Fossil-Steam (percent) 92.1 85.4 88.0
- - -------------------------------------------------------------------------------------------------------------------------
Source of Energy Supply (percent):
Coal 58.0 56.0 63.5
Oil and gas 15.2 10.2 7.6
Purchased power -
From non-affiliates 2.4 1.2 1.3
From affiliates 24.4 32.6 27.6
- - -------------------------------------------------------------------------------------------------------------------------
Total 100.0 100.0 100.0
=========================================================================================================================
Total Fuel Economy Data:
BTU per net kilowatt-hour generated 10,249 10,295 10,075
Cost of fuel per million BTU (cents) 160.48 165.96 170.13
Average cost of fuel per net kilowatt-hour generated (cents) 1.64 1.71 1.71
- - -------------------------------------------------------------------------------------------------------------------------
</TABLE>
II-212
<PAGE>
<TABLE>
<CAPTION>
SELECTED FINANCIAL AND OPERATING DATA (continued)
Mississippi Power Company 1995 Annual Report
- - -------------------------------------------------------------------------------------------------------------------------
1992 1991 1990
- - -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating Revenues (in thousands):
Residential $109,781 $103,820 $102,243
Commercial 107,131 103,666 103,352
Industrial 117,010 116,972 123,754
Other 3,533 5,869 6,078
- - -------------------------------------------------------------------------------------------------------------------------
Total retail 337,455 330,327 335,427
Sales for resale - non-affiliates 80,213 78,826 86,194
Sales for resale - affiliates 10,055 18,044 20,157
- - -------------------------------------------------------------------------------------------------------------------------
Total revenues from sales of electricity 427,723 427,197 441,778
Other revenues 6,724 5,189 5,093
- - -------------------------------------------------------------------------------------------------------------------------
Total $434,447 $432,386 $446,871
=========================================================================================================================
Kilowatt-Hour Sales (in thousands):
Residential 1,804,858 1,832,266 1,804,838
Commercial 1,811,042 1,768,441 1,718,074
Industrial 3,536,634 3,297,247 3,311,460
Other 38,261 89,375 85,938
- - -------------------------------------------------------------------------------------------------------------------------
Total retail 7,190,795 6,987,329 6,920,310
Sales for resale - non-affiliates 2,687,917 2,706,320 2,883,581
Sales for resale - affiliates 280,443 617,696 714,365
- - -------------------------------------------------------------------------------------------------------------------------
Total 10,159,155 10,311,345 10,518,256
=========================================================================================================================
Average Revenue Per Kilowatt-Hour (cents):
Residential 6.08 5.67 5.66
Commercial 5.92 5.86 6.02
Industrial 3.31 3.55 3.74
Total retail 4.69 4.73 4.85
Total sales 4.21 4.14 4.20
Residential Average Annual Kilowatt-Hour Use Per Customer 12,066 12,338 12,228
Residential Average Annual Revenue Per Customer $733.90 $699.11 $692.70
Plant Nameplate Capacity Ratings (year-end) (megawatts) 2,011 2,011 1,998
Maximum Peak-Hour Demand (megawatts):
Winter 1,386 1,267 1,201
Summer 1,755 1,682 1,724
Annual Load Factor (percent) 60.8 61.5 59.0
Plant Availability - Fossil-Steam (percent) 92.0 89.8 93.3
- - -------------------------------------------------------------------------------------------------------------------------
Source of Energy Supply (percent):
Coal 60.4 64.1 62.6
Oil and gas 5.8 8.1 14.0
Purchased power -
From non-affiliates 1.2 0.7 0.8
From affiliates 32.6 27.1 22.6
- - -------------------------------------------------------------------------------------------------------------------------
Total 100.0 100.0 100.0
=========================================================================================================================
Total Fuel Economy Data:
BTU per net kilowatt-hour generated 9,888 10,142 10,319
Cost of fuel per million BTU (cents) 162.27 177.52 183.27
Average cost of fuel per net kilowatt-hour generated (cents) 1.60 1.80 1.89
- - -------------------------------------------------------------------------------------------------------------------------
</TABLE>
II-213A
<PAGE>
<TABLE>
<CAPTION>
SELECTED FINANCIAL AND OPERATING DATA (continued)
Mississippi Power Company 1995 Annual Report
- - -------------------------------------------------------------------------------------------------------------------------
1989 1988 1987
- - -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating Revenues (in thousands):
Residential $100,068 $96,711 $98,338
Commercial 103,403 98,772 98,669
Industrial 128,983 123,038 129,004
Other 5,992 5,874 5,723
- - -------------------------------------------------------------------------------------------------------------------------
Total retail 338,446 324,395 331,734
Sales for resale - non-affiliates 82,111 75,525 88,060
Sales for resale - affiliates 16,938 33,747 31,278
- - -------------------------------------------------------------------------------------------------------------------------
Total revenues from sales of electricity 437,495 433,667 451,072
Other revenues 5,155 4,272 4,771
- - -------------------------------------------------------------------------------------------------------------------------
Total $442,650 $437,939 $455,843
=========================================================================================================================
Kilowatt-Hour Sales (in thousands):
Residential 1,741,855 1,686,722 1,658,327
Commercial 1,686,302 1,607,988 1,555,044
Industrial 3,204,208 2,879,457 2,862,632
Other 87,611 86,049 81,153
- - -------------------------------------------------------------------------------------------------------------------------
Total retail 6,719,976 6,260,216 6,157,156
Sales for resale - non-affiliates 2,798,086 2,280,341 2,615,058
Sales for resale - affiliates 527,970 1,100,808 955,303
- - -------------------------------------------------------------------------------------------------------------------------
Total 10,046,032 9,641,365 9,727,517
=========================================================================================================================
Average Revenue Per Kilowatt-Hour (cents):
Residential 5.74 5.73 5.93
Commercial 6.13 6.14 6.35
Industrial 4.03 4.27 4.51
Total retail 5.04 5.18 5.39
Total sales 4.35 4.50 4.64
Residential Average Annual Kilowatt-Hour Use Per Customer 11,842 11,499 11,356
Residential Average Annual Revenue Per Customer $680.32 $659.30 $673.41
Plant Nameplate Capacity Ratings (year-end) (megawatts) 1,998 1,966 1,966
Maximum Peak-Hour Demand (megawatts):
Winter 1,556 1,284 1,224
Summer 1,682 1,621 1,548
Annual Load Factor (percent) 58.8 57.6 59.0
Plant Availability - Fossil-Steam (percent) 94.0 93.0 93.5
- - -------------------------------------------------------------------------------------------------------------------------
Source of Energy Supply (percent):
Coal 63.4 86.3 79.4
Oil and gas 13.5 4.8 5.3
Purchased power -
From non-affiliates 0.5 0.4 0.3
From affiliates 22.6 8.5 15.0
- - -------------------------------------------------------------------------------------------------------------------------
Total 100.0 100.0 100.0
=========================================================================================================================
Total Fuel Economy Data:
BTU per net kilowatt-hour generated 10,159 10,220 10,525
Cost of fuel per million BTU (cents) 178.38 185.13 194.46
Average cost of fuel per net kilowatt-hour generated (cents) 1.81 1.89 2.05
- - -------------------------------------------------------------------------------------------------------------------------
</TABLE>
II-213B
<PAGE>
<TABLE>
<CAPTION>
SELECTED FINANCIAL AND OPERATING DATA (continued)
Mississippi Power Company 1995 Annual Report
- - ---------------------------------------------------------------------------------------------------------
1986 1985
- - ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operating Revenues (in thousands):
Residential $101,984 $96,878
Commercial 100,521 96,883
Industrial 134,501 129,495
Other 5,882 5,884
- - ---------------------------------------------------------------------------------------------------------
Total retail 342,888 329,140
Sales for resale - non-affiliates 107,270 115,757
Sales for resale - affiliates 21,669 27,277
- - ---------------------------------------------------------------------------------------------------------
Total revenues from sales of electricity 471,827 472,174
Other revenues 4,438 3,436
- - ---------------------------------------------------------------------------------------------------------
Total $476,265 $475,610
=========================================================================================================
Kilowatt-Hour Sales (in thousands):
Residential 1,674,407 1,603,539
Commercial 1,544,899 1,500,972
Industrial 2,877,026 2,786,883
Other 81,352 83,142
- - ---------------------------------------------------------------------------------------------------------
Total retail 6,177,684 5,974,536
Sales for resale - non-affiliates 2,382,443 2,819,439
Sales for resale - affiliates 704,461 733,142
- - ---------------------------------------------------------------------------------------------------------
Total 9,264,588 9,527,117
=========================================================================================================
Average Revenue Per Kilowatt-Hour (cents):
Residential 6.09 6.04
Commercial 6.51 6.45
Industrial 4.68 4.65
Total retail 5.55 5.51
Total sales 5.09 4.96
Residential Average Annual Kilowatt-Hour Use Per Customer 11,498 11,135
Residential Average Annual Revenue Per Customer $700.32 $672.71
Plant Nameplate Capacity Ratings (year-end) (megawatts) 1,966 1,966
Maximum Peak-Hour Demand (megawatts):
Winter 1,208 1,310
Summer 1,612 1,444
Annual Load Factor (percent) 56.8 61.0
Plant Availability - Fossil-Steam (percent) 93.2 92.4
- - ---------------------------------------------------------------------------------------------------------
Source of Energy Supply (percent):
Coal 74.1 74.1
Oil and gas 5.1 2.8
Purchased power -
From non-affiliates 2.0 0.4
From affiliates 18.8 22.7
- - ---------------------------------------------------------------------------------------------------------
Total 100.0 100.0
=========================================================================================================
Total Fuel Economy Data:
BTU per net kilowatt-hour generated 10,569 10,396
Cost of fuel per million BTU (cents) 224.63 235.24
Average cost of fuel per net kilowatt-hour generated (cents) 2.37 2.45
- - ---------------------------------------------------------------------------------------------------------
</TABLE>
II-213C
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF INCOME
Mississippi Power Company
===================================================================================================================================
For the Years Ended December 31, 1995 1994 1993
- - -----------------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
Operating Revenues:
Revenues $ 508,862 $ 489,624 $ 459,364
Revenues from affiliates 7,691 9,538 15,519
- - -----------------------------------------------------------------------------------------------------------------------------------
Total operating revenues 516,553 499,162 474,883
- - -----------------------------------------------------------------------------------------------------------------------------------
Operating Expenses:
Operation --
Fuel 111,071 102,216 113,986
Purchased power from non-affiliates 6,019 2,711 2,198
Purchased power from affiliates 57,777 68,543 58,019
Proceeds from settlement of disputed contracts - - -
Other 107,296 97,988 100,381
Maintenance 39,627 45,785 44,001
Depreciation and amortization 39,224 35,716 33,099
Taxes other than income taxes 42,443 41,742 37,145
Federal and state income taxes 34,486 31,386 22,668
- - -----------------------------------------------------------------------------------------------------------------------------------
Total operating expenses 437,943 426,087 411,497
- - -----------------------------------------------------------------------------------------------------------------------------------
Operating Income 78,610 73,075 63,386
Other Income (Expense):
Allowance for equity funds used during construction 366 1,099 1,010
Interest income 199 87 517
Other, net 4,596 2,033 3,971
Income taxes applicable to other income (1,006) (227) (1,158)
- - -----------------------------------------------------------------------------------------------------------------------------------
Income Before Interest Charges 82,765 76,067 67,726
- - -----------------------------------------------------------------------------------------------------------------------------------
Interest Charges:
Interest on long-term debt 21,898 19,725 17,688
Allowance for debt funds used during construction (399) (1,039) (788)
Interest on notes payable 1,141 1,442 1,000
Amortization of debt discount, premium, and expense, net 1,510 1,479 1,262
Other interest charges 1,185 404 728
- - -----------------------------------------------------------------------------------------------------------------------------------
Net interest charges 25,335 22,011 19,890
- - -----------------------------------------------------------------------------------------------------------------------------------
Net Income From Continuing Operations 57,430 54,056 47,836
- - -----------------------------------------------------------------------------------------------------------------------------------
Discontinued Operations:
Loss from operations of discontinued subsidiary, net of taxes - - -
Loss on disposal of discontinued subsidiary, net of taxes - - -
Net Loss From Discontinued Operations - - -
- - -----------------------------------------------------------------------------------------------------------------------------------
Net Income 57,430 54,056 47,836
Dividends on Preferred Stock 4,899 4,899 5,400
- - -----------------------------------------------------------------------------------------------------------------------------------
Net Income After Dividends on Preferred Stock $ 52,531 $ 49,157 $ 42,436
===================================================================================================================================
</TABLE>
II-214
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF INCOME
Mississippi Power Company
===================================================================================================================================
For the Years Ended December 31, 1992 1991 1990
- - -----------------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
Operating Revenues:
Revenues $ 424,392 $ 414,342 $ 426,714
Revenues from affiliates 10,055 18,044 20,157
- - -----------------------------------------------------------------------------------------------------------------------------------
Total operating revenues 434,447 432,386 446,871
- - -----------------------------------------------------------------------------------------------------------------------------------
Operating Expenses:
Operation --
Fuel 96,743 120,485 138,303
Purchased power from non-affiliates 1,337 851 1,406
Purchased power from affiliates 60,689 45,506 49,547
Proceeds from settlement of disputed contracts (189) (4,205) -
Other 90,581 86,932 83,730
Maintenance 43,165 44,166 33,368
Depreciation and amortization 32,789 32,147 30,770
Taxes other than income taxes 34,664 35,414 32,709
Federal and state income taxes 16,378 13,976 17,144
- - -----------------------------------------------------------------------------------------------------------------------------------
Total operating expenses 376,157 375,272 386,977
- - -----------------------------------------------------------------------------------------------------------------------------------
Operating Income 58,290 57,114 59,894
Other Income (Expense):
Allowance for equity funds used during construction 642 728 307
Interest income 766 1,093 829
Other, net 5,501 3,845 6,297
Income taxes applicable to other income (1,427) (863) (1,666)
- - -----------------------------------------------------------------------------------------------------------------------------------
Income Before Interest Charges 63,772 61,917 65,661
- - -----------------------------------------------------------------------------------------------------------------------------------
Interest Charges:
Interest on long-term debt 22,357 23,656 22,221
Allowance for debt funds used during construction (563) (584) (600)
Interest on notes payable 362 603 1,142
Amortization of debt discount, premium, and expense, net 630 377 359
Other interest charges 339 285 333
- - -----------------------------------------------------------------------------------------------------------------------------------
Net interest charges 23,125 24,337 23,455
- - -----------------------------------------------------------------------------------------------------------------------------------
Net Income From Continuing Operations 40,647 37,580 42,206
- - -----------------------------------------------------------------------------------------------------------------------------------
Discontinued Operations:
Loss from operations of discontinued subsidiary, net of taxes - (6,404) (4,669)
Loss on disposal of discontinued subsidiary, net of taxes - (5,455) -
Net Loss From Discontinued Operations - (11,859) (4,669)
- - -----------------------------------------------------------------------------------------------------------------------------------
Net Income 40,647 25,721 37,537
Dividends on Preferred Stock 3,857 3,094 3,361
- - -----------------------------------------------------------------------------------------------------------------------------------
Net Income After Dividends on Preferred Stock $ 36,790 $ 22,627 $ 34,176
===================================================================================================================================
</TABLE>
II-215A
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF INCOME
Mississippi Power Company
===================================================================================================================================
For the Years Ended December 31, 1989 1988 1987
- - -----------------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
Operating Revenues:
Revenues $ 425,712 $ 404,192 $ 424,565
Revenues from affiliates 16,938 33,747 31,278
- - -----------------------------------------------------------------------------------------------------------------------------------
Total operating revenues 442,650 437,939 455,843
- - -----------------------------------------------------------------------------------------------------------------------------------
Operating Expenses:
Operation --
Fuel 133,671 165,912 167,165
Purchased power from non-affiliates 1,266 1,257 1,108
Purchased power from affiliates 47,066 19,270 36,114
Proceeds from settlement of disputed contracts - - -
Other 84,820 83,542 81,331
Maintenance 35,658 33,412 33,974
Depreciation and amortization 28,001 26,610 26,210
Taxes other than income taxes 32,435 29,638 27,882
Federal and state income taxes 18,387 20,313 23,888
- - -----------------------------------------------------------------------------------------------------------------------------------
Total operating expenses 381,304 379,954 397,672
- - -----------------------------------------------------------------------------------------------------------------------------------
Operating Income 61,346 57,985 58,171
Other Income (Expense):
Allowance for equity funds used during construction 903 850 608
Interest income 1,096 1,030 1,121
Other, net 6,013 6,399 7,065
Income taxes applicable to other income (1,392) (1,148) (2,507)
- - -----------------------------------------------------------------------------------------------------------------------------------
Income Before Interest Charges 67,966 65,116 64,458
- - -----------------------------------------------------------------------------------------------------------------------------------
Interest Charges:
Interest on long-term debt 21,685 22,271 24,139
Allowance for debt funds used during construction (821) (595) (652)
Interest on notes payable 689 341 558
Amortization of debt discount, premium, and expense, net 362 363 388
Other interest charges 566 522 601
- - -----------------------------------------------------------------------------------------------------------------------------------
Net interest charges 22,481 22,902 25,034
- - -----------------------------------------------------------------------------------------------------------------------------------
Net Income From Continuing Operations 45,485 42,214 39,424
- - -----------------------------------------------------------------------------------------------------------------------------------
Discontinued Operations:
Loss from operations of discontinued subsidiary, net of taxes (3,459) (2,549) (487)
Loss on disposal of discontinued subsidiary, net of taxes - - -
Net Loss From Discontinued Operations (3,459) (2,549) (487)
- - -----------------------------------------------------------------------------------------------------------------------------------
Net Income 42,026 39,665 38,937
Dividends on Preferred Stock 3,450 3,584 3,737
- - -----------------------------------------------------------------------------------------------------------------------------------
Net Income After Dividends on Preferred Stock $ 38,576 $ 36,081 $ 35,200
===================================================================================================================================
</TABLE>
II-215B
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF INCOME
Mississippi Power Company
==================================================================================================================
For the Years Ended December 31, 1986 1985
- - ------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C>
Operating Revenues:
Revenues $ 454,596 $ 448,333
Revenues from affiliates 21,669 27,277
- - ------------------------------------------------------------------------------------------------------------------
Total operating revenues 476,265 475,610
- - ------------------------------------------------------------------------------------------------------------------
Operating Expenses:
Operation --
Fuel 183,515 188,477
Purchased power from non-affiliates 4,671 1,807
Purchased power from affiliates 46,322 56,522
Proceeds from settlement of disputed contracts - -
Other 70,009 58,528
Maintenance 31,368 39,509
Depreciation and amortization 30,293 25,412
Taxes other than income taxes 26,145 23,930
Federal and state income taxes 30,881 29,142
- - ------------------------------------------------------------------------------------------------------------------
Total operating expenses 423,204 423,327
- - ------------------------------------------------------------------------------------------------------------------
Operating Income 53,061 52,283
Other Income (Expense):
Allowance for equity funds used during construction 1,030 693
Interest income 864 1,326
Other, net 8,983 9,867
Income taxes applicable to other income (3,517) (3,880)
- - ------------------------------------------------------------------------------------------------------------------
Income Before Interest Charges 60,421 60,289
- - ------------------------------------------------------------------------------------------------------------------
Interest Charges:
Interest on long-term debt 22,707 22,684
Allowance for debt funds used during construction (770) (434)
Interest on notes payable 252 -
Amortization of debt discount, premium, and expense, net 245 146
Other interest charges 283 562
- - ------------------------------------------------------------------------------------------------------------------
Net interest charges 22,717 22,958
- - ------------------------------------------------------------------------------------------------------------------
Net Income From Continuing Operations 37,704 37,331
- - ------------------------------------------------------------------------------------------------------------------
Discontinued Operations:
Loss from operations of discontinued subsidiary, net of taxes - -
Loss on disposal of discontinued subsidiary, net of taxes - -
Net Loss From Discontinued Operations - -
- - ------------------------------------------------------------------------------------------------------------------
Net Income 37,704 37,331
Dividends on Preferred Stock 3,890 4,001
- - ------------------------------------------------------------------------------------------------------------------
Net Income After Dividends on Preferred Stock $ 33,814 $ 33,330
==================================================================================================================
</TABLE>
II-215C
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS
Mississippi Power Company
=======================================================================================================================
For the Years Ended December 31, 1995 1994 1993
- - -----------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
Operating Activities:
Net income $ 57,430 $ 54,056 $ 47,836
Adjustments to reconcile net income to net
cash provided by operating activities --
Depreciation and amortization 51,588 47,827 45,660
Deferred income taxes, net (480) 1,563 5,039
Deferred investment tax credits, net - - -
Allowance for equity funds used during construction (366) (1,099) (1,010)
Non-cash proceeds from settlement of disputed contracts - - -
Other, net 5,704 5,230 3,005
Changes in certain current assets and liabilities --
Receivables, net (8,758) 3,066 (4,347)
Inventories 3,962 (9,856) 11,119
Payables 17,421 (8,754) 4,133
Other 681 3,334 (8,033)
- - -----------------------------------------------------------------------------------------------------------------------
Net cash provided from operating activities 127,182 95,367 103,402
- - -----------------------------------------------------------------------------------------------------------------------
Investing Activities:
Gross property additions (67,570) (104,014) (139,976)
Other (1,697) (14,087) 7,562
- - -----------------------------------------------------------------------------------------------------------------------
Net cash used for investing activities (69,267) (118,101) (132,414)
- - -----------------------------------------------------------------------------------------------------------------------
Financing Activities and Capital Contributions:
Proceeds:
Preferred stock - - 23,404
First mortgage bonds 30,000 35,000 70,000
Pollution control bonds 10,600 - 38,875
Other long-term debt - 85,310 -
Capital contributions - 25,000 30,036
Redemptions:
Preferred stock - - (23,404)
First mortgage bonds (1,625) (32,628) (51,300)
Pollution control bonds (10) (10) (25,885)
Other long-term debt (40,689) (9,299) (8,170)
Notes payable, net - (40,000) 9,000
Payment of preferred stock dividends (4,899) (4,899) (5,400)
Payment of common stock dividends (39,400) (34,100) (29,000)
Miscellaneous (568) (1,201) (5,683)
- - -----------------------------------------------------------------------------------------------------------------------
Net cash provided from (used for) financing activities (46,591) 23,173 22,473
- - -----------------------------------------------------------------------------------------------------------------------
Net Change in Cash and Cash Equivalents 11,324 439 (6,539)
Cash and Cash Equivalents at Beginning of Year 1,317 878 7,417
- - -----------------------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Year $ 12,641 $ 1,317 $ 878
=======================================================================================================================
( ) Denotes use of cash.
</TABLE>
II-216
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS
Mississippi Power Company
=======================================================================================================================
For the Years Ended December 31, 1992 1991 1990
- - -----------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
Operating Activities:
Net income $ 40,647 $ 25,721 $ 37,537
Adjustments to reconcile net income to net
cash provided by operating activities --
Depreciation and amortization 41,472 41,773 41,079
Deferred income taxes, net (5,473) (11,869) 2,756
Deferred investment tax credits, net - (2) (26)
Allowance for equity funds used during construction (642) (728) (307)
Non-cash proceeds from settlement of disputed contracts (189) (4,071) -
Other, net 8,093 (4,982) 7,257
Changes in certain current assets and liabilities --
Receivables, net 1,002 35,343 (6,252)
Inventories 975 10,518 (8,922)
Payables 460 (4,949) (5,552)
Other 6,095 11,433 (1,461)
- - -----------------------------------------------------------------------------------------------------------------------
Net cash provided from operating activities 92,440 98,187 66,109
- - -----------------------------------------------------------------------------------------------------------------------
Investing Activities:
Gross property additions (68,189) (53,675) (49,009)
Other 4,235 2,148 4,481
- - -----------------------------------------------------------------------------------------------------------------------
Net cash used for investing activities (63,954) (51,527) (44,528)
- - -----------------------------------------------------------------------------------------------------------------------
Financing Activities and Capital Contributions:
Proceeds:
Preferred stock 35,000 - -
First mortgage bonds 40,000 50,000 -
Pollution control bonds 23,300 - -
Other long-term debt - 844 -
Capital contributions 26 - -
Redemptions:
Preferred stock - (4,118) (750)
First mortgage bonds (104,703) - (4,000)
Pollution control bonds (23,650) (300) (288)
Other long-term debt (6,212) (8,958) (6,416)
Notes payable, net 26,500 (25,603) 17,146
Payment of preferred stock dividends (3,857) (3,094) (3,361)
Payment of common stock dividends (28,000) (28,500) (27,500)
Miscellaneous (7,821) (839) 2
- - -----------------------------------------------------------------------------------------------------------------------
Net cash provided from (used for) financing activities (49,417) (20,568) (25,167)
- - -----------------------------------------------------------------------------------------------------------------------
Net Change in Cash and Cash Equivalents (20,931) 26,092 (3,586)
Cash and Cash Equivalents at Beginning of Year 28,348 2,256 5,842
- - -----------------------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Year $ 7,417 $ 28,348 $ 2,256
=======================================================================================================================
( ) Denotes use of cash.
</TABLE>
II-217A
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS
Mississippi Power Company
=======================================================================================================================
For the Years Ended December 31, 1989 1988 1987
- - -----------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
Operating Activities:
Net income $ 42,026 $ 39,665 $ 38,937
Adjustments to reconcile net income to net
cash provided by operating activities --
Depreciation and amortization 35,878 34,440 33,971
Deferred income taxes, net (294) (3,053) 10,035
Deferred investment tax credits, net (38) 571 896
Allowance for equity funds used during construction (903) (850) (608)
Non-cash proceeds from settlement of disputed contracts - - -
Other, net 4,306 3,503 1,965
Changes in certain current assets and liabilities --
Receivables, net (18,506) 816 12,000
Inventories 3,687 283 13,708
Payables 1,307 (5,241) 7,487
Other 2,172 (2,294) (9,342)
- - -----------------------------------------------------------------------------------------------------------------------
Net cash provided from operating activities 69,635 67,840 109,049
- - -----------------------------------------------------------------------------------------------------------------------
Investing Activities:
Gross property additions (43,916) (54,550) (53,288)
Other 1,860 8,368 (1,461)
- - -----------------------------------------------------------------------------------------------------------------------
Net cash used for investing activities (42,056) (46,182) (54,749)
- - -----------------------------------------------------------------------------------------------------------------------
Financing Activities and Capital Contributions:
Proceeds:
Preferred stock - - -
First mortgage bonds - - -
Pollution control bonds - - -
Other long-term debt 844 - 130
Capital contributions - - 16,000
Redemptions:
Preferred stock (750) (1,500) (1,500)
First mortgage bonds (3,823) - (29,701)
Pollution control bonds (62) (50) (50)
Other long-term debt (5,919) (5,401) (4,974)
Notes payable, net 6,457 6,500 -
Payment of preferred stock dividends (3,450) (3,584) (3,737)
Payment of common stock dividends (27,000) (27,600) (24,700)
Miscellaneous - - (2,696)
- - -----------------------------------------------------------------------------------------------------------------------
Net cash provided from (used for) financing activities (33,703) (31,635) (51,228)
- - -----------------------------------------------------------------------------------------------------------------------
Net Change in Cash and Cash Equivalents (6,124) (9,977) 3,072
Cash and Cash Equivalents at Beginning of Year 11,966 21,943 18,871
- - -----------------------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Year $ 5,842 $ 11,966 $ 21,943
=======================================================================================================================
( ) Denotes use of cash.
</TABLE>
II-217B
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS
Mississippi Power Company
=======================================================================================================
For the Years Ended December 31, 1986 1985
- - -------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C>
Operating Activities:
Net income $ 37,704 $ 37,331
Adjustments to reconcile net income to net
cash provided by operating activities --
Depreciation and amortization 33,432 28,229
Deferred income taxes, net 41,059 11,246
Deferred investment tax credits, net 2,442 1,749
Allowance for equity funds used during construction (1,030) (693)
Non-cash proceeds from settlement of disputed contracts - -
Other, net (14,162) (2,709)
Changes in certain current assets and liabilities --
Receivables, net (1,708) (5,050)
Inventories (8,499) 12,281
Payables (14,502) 4,656
Other 11,546 (3,725)
- - -------------------------------------------------------------------------------------------------------
Net cash provided from operating activities 86,282 83,315
- - -------------------------------------------------------------------------------------------------------
Investing Activities:
Gross property additions (62,488) (57,791)
Other (61,162) 3,825
- - -------------------------------------------------------------------------------------------------------
Net cash used for investing activities (123,650) (53,966)
- - -------------------------------------------------------------------------------------------------------
Financing Activities and Capital Contributions:
Proceeds:
Preferred stock - -
First mortgage bonds 35,000 -
Pollution control bonds - -
Other long-term debt 60,663 1,000
Capital contributions 400 400
Redemptions:
Preferred stock (1,500) (1,111)
First mortgage bonds (29,250) (250)
Pollution control bonds (50) (50)
Other long-term debt (200) -
Notes payable, net - -
Payment of preferred stock dividends (3,890) (4,001)
Payment of common stock dividends (23,700) (22,600)
Miscellaneous (2,929) (18)
- - -------------------------------------------------------------------------------------------------------
Net cash provided from (used for) financing activities 34,544 (26,630)
- - -------------------------------------------------------------------------------------------------------
Net Change in Cash and Cash Equivalents (2,824) 2,719
Cash and Cash Equivalents at Beginning of Year 21,695 18,976
- - -------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Year $ 18,871 $ 21,695
=======================================================================================================
( ) Denotes use of cash.
</TABLE>
II-217C
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
Mississippi Power Company
==============================================================================================================================
At December 31, 1995 1994 1993
- - ------------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
ASSETS
Utility Plant:
Production-fossil $ 717,055 $ 705,043 $ 597,425
Transmission 220,038 202,503 188,375
Distribution 335,163 313,345 295,799
General 162,071 164,141 157,248
Construction work in progress 41,210 44,838 108,063
- - ------------------------------------------------------------------------------------------------------------------------------
Total utility plant 1,475,537 1,429,870 1,346,910
Accumulated provision for depreciation 499,308 477,098 462,725
- - ------------------------------------------------------------------------------------------------------------------------------
Total 976,229 952,772 884,185
- - ------------------------------------------------------------------------------------------------------------------------------
Less property-related accumulated deferred income taxes - - -
- - ------------------------------------------------------------------------------------------------------------------------------
Total 976,229 952,772 884,185
- - ------------------------------------------------------------------------------------------------------------------------------
Other Property and Investments:
Securities received from settlement of disputed contracts - - -
Miscellaneous 4,160 3,353 11,289
- - ------------------------------------------------------------------------------------------------------------------------------
Total 4,160 3,353 11,289
- - ------------------------------------------------------------------------------------------------------------------------------
Current Assets:
Cash and cash equivalents 12,641 1,317 878
Investment securities - - -
Receivables, net 36,228 25,424 28,021
Accrued utility revenues 12,382 14,428 14,897
Fossil fuel stock, at average cost 15,666 16,885 11,185
Materials and supplies, at average cost 22,558 25,301 21,145
Current portion of deferred fuel commitments 1,546 1,068 440
Prepayments 7,584 11,189 8,971
Vacation pay deferred 4,715 4,588 4,797
- - ------------------------------------------------------------------------------------------------------------------------------
Total 113,320 100,200 90,334
- - ------------------------------------------------------------------------------------------------------------------------------
Deferred Charges:
Debt expense, being amortized 1,530 1,358 1,103
Premium on reacquired debt, being amortized 8,509 9,571 10,563
Deferred fuel commitments - 9,000 17,520
Deferred charges related to income taxes 23,384 25,036 25,267
Miscellaneous 21,821 22,421 10,073
- - ------------------------------------------------------------------------------------------------------------------------------
Total 55,244 67,386 64,526
- - ------------------------------------------------------------------------------------------------------------------------------
Total Assets $ 1,148,953 $ 1,123,711 $ 1,050,334
==============================================================================================================================
</TABLE>
II-218
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
Mississippi Power Company
==============================================================================================================================
At December 31, 1992 1991 1990
- - ------------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
ASSETS
Utility Plant:
Production-fossil $ 576,848 $ 567,588 $ 560,537
Transmission 173,278 162,379 151,949
Distribution 279,335 259,929 247,705
General 151,044 141,564 136,815
Construction work in progress 41,692 33,078 26,816
- - ------------------------------------------------------------------------------------------------------------------------------
Total utility plant 1,222,197 1,164,538 1,123,822
Accumulated provision for depreciation 440,777 415,135 392,440
- - ------------------------------------------------------------------------------------------------------------------------------
Total 781,420 749,403 731,382
- - ------------------------------------------------------------------------------------------------------------------------------
Less property-related accumulated deferred income taxes 142,338 138,616 139,970
- - ------------------------------------------------------------------------------------------------------------------------------
Total 639,082 610,787 591,412
- - ------------------------------------------------------------------------------------------------------------------------------
Other Property and Investments:
Securities received from settlement of disputed contracts - 4,113 -
Miscellaneous 4,539 3,954 8,631
- - ------------------------------------------------------------------------------------------------------------------------------
Total 4,539 8,067 8,631
- - ------------------------------------------------------------------------------------------------------------------------------
Current Assets:
Cash and cash equivalents 7,417 28,348 2,256
Investment securities 3,622 - -
Receivables, net 20,219 27,152 67,734
Accrued utility revenues 14,898 12,420 10,797
Fossil fuel stock, at average cost 21,341 22,373 29,812
Materials and supplies, at average cost 22,108 22,051 25,130
Current portion of deferred fuel commitments 1,861 933 1,430
Prepayments 5,869 6,137 11,392
Vacation pay deferred 4,651 4,406 3,955
- - ------------------------------------------------------------------------------------------------------------------------------
Total 101,986 123,820 152,506
- - ------------------------------------------------------------------------------------------------------------------------------
Deferred Charges:
Debt expense, being amortized 804 981 824
Premium on reacquired debt, being amortized 10,102 4,676 4,919
Deferred fuel commitments 25,255 31,039 39,020
Deferred charges related to income taxes - - -
Miscellaneous 9,515 11,271 2,714
- - ------------------------------------------------------------------------------------------------------------------------------
Total 45,676 47,967 47,477
- - ------------------------------------------------------------------------------------------------------------------------------
Total Assets $ 791,283 $ 790,641 $ 800,026
==============================================================================================================================
</TABLE>
II-219A
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
Mississippi Power Company
==============================================================================================================================
At December 31, 1989 1988 1987
- - ------------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
ASSETS
Utility Plant:
Production-fossil $ 547,946 $ 529,742 $ 524,198
Transmission 147,288 134,674 130,963
Distribution 229,238 221,327 207,810
General 133,361 137,333 127,690
Construction work in progress 27,057 35,204 27,755
- - ------------------------------------------------------------------------------------------------------------------------------
Total utility plant 1,084,890 1,058,280 1,018,416
Accumulated provision for depreciation 366,193 348,085 328,761
- - ------------------------------------------------------------------------------------------------------------------------------
Total 718,697 710,195 689,655
- - ------------------------------------------------------------------------------------------------------------------------------
Less property-related accumulated deferred income taxes 138,071 134,220 127,912
- - ------------------------------------------------------------------------------------------------------------------------------
Total 580,626 575,975 561,743
- - ------------------------------------------------------------------------------------------------------------------------------
Other Property and Investments:
Securities received from settlement of disputed contracts - - -
Miscellaneous 7,792 8,153 4,122
- - ------------------------------------------------------------------------------------------------------------------------------
Total 7,792 8,153 4,122
- - ------------------------------------------------------------------------------------------------------------------------------
Current Assets:
Cash and cash equivalents 5,842 11,966 21,943
Investment securities - - -
Receivables, net 58,425 43,246 42,218
Accrued utility revenues 13,854 10,527 12,371
Fossil fuel stock, at average cost 24,788 26,587 29,989
Materials and supplies, at average cost 21,232 23,120 20,001
Current portion of deferred fuel commitments 3,017 - -
Prepayments 12,512 12,341 830
Vacation pay deferred 3,910 3,815 3,956
- - ------------------------------------------------------------------------------------------------------------------------------
Total 143,580 131,602 131,308
- - ------------------------------------------------------------------------------------------------------------------------------
Deferred Charges:
Debt expense, being amortized 886 949 1,012
Premium on reacquired debt, being amortized 5,161 5,404 5,647
Deferred fuel commitments 45,103 50,714 55,889
Deferred charges related to income taxes - - -
Miscellaneous 3,422 6,522 4,347
- - ------------------------------------------------------------------------------------------------------------------------------
Total 54,572 63,589 66,895
- - ------------------------------------------------------------------------------------------------------------------------------
Total Assets $ 786,570 $ 779,319 $ 764,068
==============================================================================================================================
</TABLE>
II-219B
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
Mississippi Power Company
===========================================================================================================
At December 31, 1986 1985
- - -----------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C>
ASSETS
Utility Plant:
Production-fossil $ 509,128 $ 485,665
Transmission 125,304 121,405
Distribution 195,042 183,003
General 114,042 99,788
Construction work in progress 33,544 34,862
- - -----------------------------------------------------------------------------------------------------------
Total utility plant 977,060 924,723
Accumulated provision for depreciation 312,571 293,167
- - -----------------------------------------------------------------------------------------------------------
Total 664,489 631,556
- - -----------------------------------------------------------------------------------------------------------
Less property-related accumulated deferred income taxes 120,990 107,633
- - -----------------------------------------------------------------------------------------------------------
Total 543,499 523,923
- - -----------------------------------------------------------------------------------------------------------
Other Property and Investments:
Securities received from settlement of disputed contracts - -
Miscellaneous 1,738 641
- - -----------------------------------------------------------------------------------------------------------
Total 1,738 641
- - -----------------------------------------------------------------------------------------------------------
Current Assets:
Cash and cash equivalents 18,871 21,695
Investment securities - -
Receivables, net 48,158 42,407
Accrued utility revenues 18,431 22,474
Fossil fuel stock, at average cost 46,067 40,638
Materials and supplies, at average cost 17,631 14,561
Current portion of deferred fuel commitments - -
Prepayments 973 805
Vacation pay deferred 3,559 3,337
- - -----------------------------------------------------------------------------------------------------------
Total 153,690 145,917
- - -----------------------------------------------------------------------------------------------------------
Deferred Charges:
Debt expense, being amortized 1,212 1,208
Premium on reacquired debt, being amortized 2,800 -
Deferred fuel commitments 60,663 -
Deferred charges related to income taxes - -
Miscellaneous 3,508 7,888
- - -----------------------------------------------------------------------------------------------------------
Total 68,183 9,096
- - -----------------------------------------------------------------------------------------------------------
Total Assets $ 767,110 $ 679,577
===========================================================================================================
</TABLE>
II-219C
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
Mississippi Power Company
==============================================================================================================================
At December 31, 1995 1994 1993
- - ------------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock $ 37,691 $ 37,691 $ 37,691
Paid-in capital 179,362 179,362 154,362
Premium on preferred stock 372 372 372
Earnings retained in the business 157,459 144,328 129,343
- - ------------------------------------------------------------------------------------------------------------------------------
Total common equity 374,884 361,753 321,768
Preferred stock 74,414 74,414 74,414
Preferred stock subject to mandatory redemption - - -
Long-term debt 288,820 306,522 250,391
- - ------------------------------------------------------------------------------------------------------------------------------
Total (excluding amount due within one year) 738,118 742,689 646,573
- - ------------------------------------------------------------------------------------------------------------------------------
Current Liabilities:
Notes payable to banks - - 40,000
Preferred stock due within one year - - -
Long-term debt due within one year 57,229 41,199 19,345
Accounts payable 50,775 34,481 60,928
Customer deposits 2,716 2,712 2,786
Taxes accrued 31,913 31,657 27,138
Interest accrued 4,701 4,427 4,237
Vacation pay accrued 4,563 4,588 4,797
Miscellaneous 8,890 10,025 9,323
- - ------------------------------------------------------------------------------------------------------------------------------
Total 160,787 129,089 168,554
- - ------------------------------------------------------------------------------------------------------------------------------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 129,711 129,505 124,334
Accumulated deferred investment tax credits 29,773 31,228 32,710
Deferred credits related to income taxes 43,266 45,832 48,228
Miscellaneous 47,298 45,368 29,935
- - ------------------------------------------------------------------------------------------------------------------------------
Total 250,048 251,933 235,207
- - ------------------------------------------------------------------------------------------------------------------------------
Total Capitalization and Liabilities $ 1,148,953 $ 1,123,711 $ 1,050,334
==============================================================================================================================
</TABLE>
II-220
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
Mississippi Power Company
==============================================================================================================================
At December 31, 1992 1991 1990
- - ------------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock $ 37,691 $ 37,691 $ 37,691
Paid-in capital 124,326 124,300 124,300
Premium on preferred stock 194 194 299
Earnings retained in the business 118,429 111,670 117,543
- - ------------------------------------------------------------------------------------------------------------------------------
Total common equity 280,640 273,855 279,833
Preferred stock 74,414 39,414 39,414
Preferred stock subject to mandatory redemption - - 3,750
Long-term debt 238,650 304,150 270,724
- - ------------------------------------------------------------------------------------------------------------------------------
Total (excluding amount due within one year) 593,704 617,419 593,721
- - ------------------------------------------------------------------------------------------------------------------------------
Current Liabilities:
Notes payable to banks 31,000 4,500 30,103
Preferred stock due within one year - - 368
Long-term debt due within one year 8,878 14,650 7,039
Accounts payable 43,550 38,213 45,763
Customer deposits 2,976 3,109 3,430
Taxes accrued 32,035 29,609 24,935
Interest accrued 3,961 4,602 4,315
Vacation pay accrued 4,651 4,406 3,955
Miscellaneous 10,963 10,236 6,833
- - ------------------------------------------------------------------------------------------------------------------------------
Total 138,014 109,325 126,741
- - ------------------------------------------------------------------------------------------------------------------------------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 169 4,117 18,992
Accumulated deferred investment tax credits 34,242 35,657 37,187
Deferred credits related to income taxes - - -
Miscellaneous 25,154 24,123 23,385
- - ------------------------------------------------------------------------------------------------------------------------------
Total 59,565 63,897 79,564
- - ------------------------------------------------------------------------------------------------------------------------------
Total Capitalization and Liabilities $ 791,283 $ 790,641 $ 800,026
==============================================================================================================================
</TABLE>
II-221A
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
Mississippi Power Company
==============================================================================================================================
At December 31, 1989 1988 1987
- - ------------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock $ 37,691 $ 37,691 $ 37,691
Paid-in capital 124,300 124,300 124,300
Premium on preferred stock 299 299 299
Earnings retained in the business 110,867 99,183 90,702
- - ------------------------------------------------------------------------------------------------------------------------------
Total common equity 273,157 261,473 252,992
Preferred stock 39,414 39,414 39,414
Preferred stock subject to mandatory redemption 4,500 5,250 6,750
Long-term debt 277,693 287,525 294,811
- - ------------------------------------------------------------------------------------------------------------------------------
Total (excluding amount due within one year) 594,764 593,662 593,967
- - ------------------------------------------------------------------------------------------------------------------------------
Current Liabilities:
Notes payable to banks 12,957 6,500 -
Preferred stock due within one year 368 368 368
Long-term debt due within one year 10,717 9,789 5,451
Accounts payable 47,019 46,937 45,659
Customer deposits 3,906 3,904 3,857
Taxes accrued 23,843 21,130 21,351
Interest accrued 4,280 4,016 4,474
Vacation pay accrued 3,910 3,815 3,956
Miscellaneous 7,746 9,347 6,005
- - ------------------------------------------------------------------------------------------------------------------------------
Total 114,746 105,806 91,121
- - ------------------------------------------------------------------------------------------------------------------------------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 22,085 24,556 27,411
Accumulated deferred investment tax credits 38,752 40,435 41,427
Deferred credits related to income taxes - - -
Miscellaneous 16,223 14,860 10,142
- - ------------------------------------------------------------------------------------------------------------------------------
Total 77,060 79,851 78,980
- - ------------------------------------------------------------------------------------------------------------------------------
Total Capitalization and Liabilities $ 786,570 $ 779,319 $ 764,068
==============================================================================================================================
</TABLE>
II-221B
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
Mississippi Power Company
===========================================================================================================
At December 31, 1986 1985
- - -----------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C>
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock $ 37,691 $ 37,691
Paid-in capital 108,300 107,900
Premium on preferred stock 299 299
Earnings retained in the business 80,311 70,197
- - -----------------------------------------------------------------------------------------------------------
Total common equity 226,601 216,087
Preferred stock 39,414 39,414
Preferred stock subject to mandatory redemption 8,250 9,750
Long-term debt 299,684 261,594
- - -----------------------------------------------------------------------------------------------------------
Total (excluding amount due within one year) 573,949 526,845
- - -----------------------------------------------------------------------------------------------------------
Current Liabilities:
Notes payable to banks - -
Preferred stock due within one year 368 368
Long-term debt due within one year 34,724 6,532
Accounts payable 36,490 50,992
Customer deposits 3,720 3,521
Taxes accrued 29,029 32,015
Interest accrued 5,064 5,502
Vacation pay accrued 3,559 3,337
Miscellaneous 5,746 5,464
- - -----------------------------------------------------------------------------------------------------------
Total 118,700 107,731
- - -----------------------------------------------------------------------------------------------------------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 25,922 -
Accumulated deferred investment tax credits 42,183 41,311
Deferred credits related to income taxes - -
Miscellaneous 6,356 3,690
- - -----------------------------------------------------------------------------------------------------------
Total 74,461 45,001
- - -----------------------------------------------------------------------------------------------------------
Total Capitalization and Liabilities $ 767,110 $ 679,577
===========================================================================================================
</TABLE>
II-221C
<PAGE>
MISSISSIPPI POWER COMPANY
OUTSTANDING SECURITIES AT DECEMBER 31, 1995
First Mortgage Bonds
Amount Interest Amount
Series Issued Rate Outstanding Maturity
- - --------------------------------------------------------------------------------
(Thousands) (Thousands)
1993 $ 35,000 5-3/8% $ 35,000 3/1/98
1992 40,000 6-5/8% 40,000 8/1/00
1994 35,000 6.60% 35,000 3/1/04
1991 50,000 9-1/4% 45,447 5/1/21
1993 35,000 7.45% 35,000 6/1/23
1995 30,000 6-7/8% 30,000 12/1/25
=========== ===========
$ 225,000 $ 220,447
=========== ===========
Pollution Control Bonds
Amount Interest Amount
Series Issued Rate Outstanding Maturity
- - --------------------------------------------------------------------------------
(Thousands) (Thousands)
1977 $ 1,000 5.80% $ 970 10/1/07
1992 6,550 Variable 6,550 12/1/20
1992 16,750 Variable 16,750 12/1/22
1993 13,000 6.20% 13,000 4/1/23
1993 25,875 5.65% 25,875 11/1/23
1995 10,600 Variable 10,600 7/1/25
=========== ===========
$ 73,775 $ 73,745
=========== ===========
Preferred Stock
Shares Dividend Amount
Series Outstanding Rate Outstanding
- - -------------------------------------------------------------------
(Thousands)
1947 20,099 4.60% $ 2,010
1956 40,000 4.40% 4,000
1965 50,000 4.72% 5,000
1968 50,000 7.00% 5,000
1992 350,000 7.25% 35,000
1993 150,000 6.32% 15,000
1993 84,040 6.65% 8,404
========= ===========
744,139 $ 74,414
========= ===========
II-222
<PAGE>
MISSISSIPPI POWER COMPANY
SECURITIES RETIRED DURING 1995
First Mortgage Bonds
Principal Interest
Series Amount Rate
- - --------------------------------------------------------------------------------
(Thousands)
1991 $ 1,625 9-1/4%
Pollution Control Bonds
Principal Interest
Series Amount Rate
- - --------------------------------------------------------------------------------
(Thousands)
1977 $ 10 5.80%
II-223
<PAGE>
SAVANNAH ELECTRIC AND POWER COMPANY
FINANCIAL SECTION
II-224
<PAGE>
MANAGEMENT'S REPORT
Savannah Electric and Power Company 1995 Annual Report
The management of Savannah Electric and Power Company has prepared--and is
responsible for--the financial statements and related information included in
this report. These statements were prepared in accordance with generally
accepted accounting principles appropriate in the circumstances and necessarily
include amounts that are based on the best estimates and judgments of
management. Financial information throughout this annual report is consistent
with the financial statements.
The Company maintains a system of internal accounting controls to provide
reasonable assurance that assets are safeguarded and that books and records
reflect only authorized transactions of the Company. Limitations exist in any
system of internal controls, however, based on a recognition that the cost of
the system should not exceed its benefits. The Company believes its system of
internal accounting controls maintains an appropriate cost/benefit relationship.
The Company's system of internal accounting controls is evaluated on an
ongoing basis by the Company's internal audit staff. The Company's independent
public accountants also consider certain elements of the internal control system
in order to determine their auditing procedures for the purpose of expressing an
opinion on the financial statements.
The audit committee of the board of directors, composed of four directors
who are not employees, provides a broad overview of management's financial
reporting and control functions. Periodically, this committee meets with
management, the internal auditors and the independent public accountants to
ensure that these groups are fulfilling their obligations and to discuss
auditing, internal controls and financial reporting matters. The internal
auditors and the independent public accountants have access to the members of
the audit committee at any time.
Management believes that its policies and procedures provide reasonable
assurance that the Company's operations are conducted according to a high
standard of business ethics.
In management's opinion, the financial statements present fairly, in all
material respects, the financial position, results of operations, and cash flows
of Savannah Electric and Power Company in conformity with generally accepted
accounting principles.
/s/ Arthur M. Gignilliat, Jr.
Arthur M. Gignilliat, Jr.
President
and Chief Executive Officer
/s/ K. R. Willis
K. R. Willis
Vice-President
Treasurer and Chief Financial Officer
February 21, 1996
II-225
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of Savannah Electric and Power Company:
We have audited the accompanying balance sheets and statements of capitalization
of Savannah Electric and Power Company (a Georgia corporation and a wholly owned
subsidiary of The Southern Company) as of December 31, 1995 and 1994, and the
related statements of income, retained earnings, and cash flows for each of the
three years in the period ended December 31, 1995. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements (pages II-233 through II-245)
referred to above present fairly, in all material respects, the financial
position of Savannah Electric and Power Company as of December 31, 1995 and
1994, and the results of its operations and its cash flows for the periods
stated, in conformity with generally accepted accounting principles.
/s/ Arthur Andersen LLP
Atlanta, Georgia
February 21, 1996
II-226
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION
Savannah Electric and Power Company 1995 Annual Report
RESULTS OF OPERATIONS
Earnings
Savannah Electric and Power Company's net income after dividends on preferred
stock for 1995 totaled $23.4 million, representing a $1.3 million increase over
the prior year. This 5.8 percent improvement in earnings over 1994 is
principally the result of increased retail energy sales, primarily attributable
to exceptionally hot summer weather.
In 1994, earnings were $22.1 million, representing a $0.6 million (3.0
percent) increase from the prior year. This increase was primarily due to a
decrease in operating expenses, offset somewhat by an increase in interest
expense.
Revenues
Total revenues for 1995 were $225.7 million, reflecting a 6.6 percent increase
compared to 1994. The following table summarizes revenue increases and decreases
compared to prior years:
Increase (Decrease)
From Prior Years
--------------------------------------
1995 1994 1993
--------------------------------------
Retail -- (in thousands)
Change in base rates $ - $ - $(1,450)
Sales growth 1,068 7,884 5,980
Weather 6,232 (6,589) 4,567
Fuel cost recovery
and other 6,177 (9,214) 12,404
-------------------------------------------------------------------
Total retail 13,477 (7,919) 21,501
-------------------------------------------------------------------
Sales for resale--
Non-affiliates (2,935) (1,235) (1,800)
Affiliates 754 4,013 928
-------------------------------------------------------------------
Total sales for resale (2,181) 2,778 (872)
-------------------------------------------------------------------
Other operating revenues 2,648 (1,516) 52
-------------------------------------------------------------------
Total operating revenues $13,944 $(6,657) $20,681
===================================================================
Percent change 6.6% (3.0)% 10.5%
-------------------------------------------------------------------
Retail revenues increased 6.7 percent in 1995, compared to a decrease of
3.8 percent in 1994. The increase in 1995 retail revenues is attributable to hot
summer weather, an increase in the number of customers served, higher demand in
the industrial sector, and an increase in fuel cost recovery revenues.
Industrial energy sales were higher primarily because a major customer performed
maintenance on its cogeneration facility during 1995 and purchased replacement
energy from the Company. Under the Company's fuel cost recovery provisions, fuel
revenues--including purchased energy--generally equal fuel expense and have no
effect on earnings. The $2.6 million increase in other operating revenues
reflects a decrease in the demand-side management rider in October 1994 and an
increase in demand-side management program costs during 1995. Revenues from
demand-side management riders (included in retail revenues) recover demand-side
management program costs and have little impact on earnings. See Note 3 to the
financial statements for further information on the Company's demand-side
management programs.
The decrease in 1994 retail revenues as compared to 1993 resulted from mild
summer weather, reduced industrial energy sales, and substantially lower fuel
cost recovery revenues, offset somewhat by customer growth.
Revenues from sales to utilities outside the service area under long-term
contracts consist of capacity and energy components. Capacity revenues reflect
the recovery of fixed costs and a return on investment under the contracts.
Energy is generally sold at variable cost. Capacity and energy revenues
continued to decrease in 1995 and 1994 primarily as a result of the scheduled
decline in megawatts of capacity under contract. The capacity and energy
components were as follows:
1995 1994 1993
------------------------------------
(in thousands)
Capacity $ 3 $ 448 $ 978
Energy 1,250 3,052 4,262
- - ---------------------------------------------------------
Total $ 1,253 $3,500 $5,240
=========================================================
Sales to affiliated companies within the Southern electric system vary from
year to year depending on demand and the availability and cost of generating
resources at each company. These sales have little impact on earnings.
II-227
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Savannah Electric and Power Company 1995 Annual Report
Changes in revenues are influenced heavily by the amount of energy sold
each year. Kilowatt-hour sales for 1995 and the percent change by year were as
follows:
Percent Change
------------------------------
1995
KWH 1995 1994 1993
--------- ------------------------------
(in millions)
Residential 1,402 8.0% (2.3)% 9.2%
Commercial 1,100 5.1 2.9 6.5
Industrial 887 11.0 (6.4) (0.8)
Other 126 5.4 3.1 5.2
---------
Total retail 3,515 7.7 (1.6) 5.5
Sales for resale -
Non-affiliates 87 (56.5) (18.4) (32.7)
Affiliates 64 (31.5) 23.4 100.3
---------
Total 3,666 3.1% (2.2)% 2.6%
=========
=================================================================
Expenses
Total operating expenses for 1995 were $187.5 million, reflecting an $11.8
million increase over 1994. Major components of this increase include $6.8
million in fuel, $3.6 million in other operation, $1.1 million in maintenance,
and $1.1 million in depreciation and amortization, partially offset by a $2.6
million reduction in purchased power from affiliates. The increase in fuel
expense is primarily attributable to the exceptionally hot summer weather, which
not only increased generation but also necessitated greater use of more costly
gas-fired sources of generation. The increase in other operation expense is due
to increased expenses related to demand-side management programs and employee
incentive compensation programs. The increase in maintenance expense reflects
maintenance performed at Plants Kraft and McIntosh during 1995, and the increase
in depreciation and amortization reflects the completion in 1994 of two
combustion turbine units.
Total operating expenses for 1994 were $175.6 million, reflecting an $8.6
million decrease from 1993. This decrease includes a $5.8 million reduction in
fuel and purchased power expenses, reflecting a decrease in total energy
requirements. The $4.9 million reduction in 1994 in other operation and
maintenance expenses reflects the $4.5 million work force reduction charge in
1993 and a $1.1 million reduction in power generation expenses in 1994. This was
offset by an increase in depreciation expense because of additions to utility
plant discussed above. Interest expense increased $1.9 million primarily due to
the sale in June 1993 of $45 million of first mortgage bonds.
Fuel and purchased power costs constitute the single largest expense for
the Company. The mix of energy supply is determined primarily by system load,
the unit cost of fuel consumed and the availability of units.
The amount and sources of energy supply, the average cost of fuel per net
kilowatt-hour generated, the average cost of purchased power per net
kilowatt-hour, and the total average cost of energy supply were as follows:
1995 1994 1993
--------------------------
Total energy supply
(millions of kilowatt-hours) 3,908 3,768 3,863
Sources of energy supply
(percent) --
Coal 24 18 21
Oil - 1 2
Gas 6 1 3
Purchased Power 70 80 74
Average cost of fuel per net
kilowatt-hour generated
(cents) --
Coal 1.77 2.19 2.02
Oil 5.14 3.89 4.11
Gas 3.76 5.19 4.87
Average cost of purchased
power per net kilowatt-
hour (cents) 2.02 1.92 2.00
Total average cost of
energy supply 2.07 2.02 2.12
===============================================================
Effects of Inflation
The Company is subject to rate regulation and income tax laws that are based on
the recovery of historical costs. Therefore, inflation creates an economic loss
because the Company is recovering its costs of investments in dollars that have
less purchasing power. While the inflation rate has been relatively low in
recent years, it continues to have an adverse effect on the Company because of
II-228
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Savannah Electric and Power Company 1995 Annual Report
the large investment in long-lived utility plant. Conventional accounting for
historical cost does not recognize this economic loss nor the partially
offsetting gain that arises through financing facilities with fixed-money
obligations such as long-term debt and preferred stock. Any recognition of
inflation by regulatory authorities is reflected in the rate of return allowed.
Future Earnings Potential
The results of operations for the past three years are not necessarily
indicative of future earnings potential. The level of future earnings depends on
numerous factors ranging from energy sales growth to a less regulated, more
competitive environment.
Future earnings in the near term will depend upon growth in energy sales,
which is subject to a number of factors. Traditionally, these factors included
weather, competition, changes in contracts with neighboring utilities, energy
conservation practiced by customers, the elasticity of demand, and the rate of
economic growth in the Company's service area. However, the Energy Policy Act of
1992 (Energy Act) is beginning to have a dramatic effect on the future of the
electric utility industry. The Energy Act promotes energy efficiency,
alternative fuel use, and increased competition for electric utilities. The
Company is positioning the business to meet the challenge of this major change
in the traditional practice of selling electricity. The Energy Act allows
independent power producers (IPPs) to access a utility's transmission network to
sell electricity to other utilities. This enhances the incentive for IPPs to
build cogeneration plants for a utility's large industrial and commercial
customers and sell excess energy generation to other utilities.
Although the Energy Act does not require transmission access to retail
customers, retail wheeling initiatives are rapidly evolving and becoming very
prominent issues in several states. New federal legislation is being discussed,
and legislation allowing customer choice has already been introduced in Georgia.
In order to address these initiatives, numerous questions must be resolved, with
the most complex ones relating to transmission pricing and recovery of stranded
investments. As the initiatives become a reality, the structure of the utility
industry could radically change. Therefore, unless the Company remains a
low-cost producer and provides quality service, the Company's retail energy
sales growth could be limited, and this could significantly erode earnings.
Conversely, being the low-cost producer could provide significant opportunities
to increase market share and profitability by seeking new markets that evolve
with the changing regulation.
The Company is subject to the provisions of Financial Accounting Standards
Board (FASB) Statement No. 71, Accounting for the Effects of Certain Types of
Regulation. In the event that a portion of the Company's operations is no longer
subject to these provisions, the Company would be required to write off related
regulatory assets and liabilities and determine if any other assets have been
impaired. See Note 1 to the financial statements under "Regulatory Assets and
Liabilities" for additional information.
Compliance costs related to the Clean Air Act Amendments of 1990 (Clean Air
Act) could affect earnings if such costs are not fully recovered. The Clean Air
Act is discussed later under "Environmental Matters."
Rates to retail customers served by the Company are regulated by the
Georgia Public Service Commission (GPSC). As part of the Company's most recent
rate settlement in 1992, it was informally agreed that the Company's earned rate
of return on common equity should be 12.95 percent. The Company is currently
undergoing an earnings review by the GPSC, and to date, the GPSC has made no
determination.
In August 1995, the GPSC ordered the phase out of the Company's demand-side
management programs effective December 31, 1995 and the elimination of
demand-side management rate riders effective October 1, 1995. The Company will
refund to customers approximately $0.2 million which had been overcollected from
the rate riders as of December 31, 1995.
New Accounting Standards
The FASB has issued Statement No. 121, Accounting for the Impairment of
Long-Lived Assets and Long-Lived Assets to Be Disposed Of. This statement
requires that long-lived assets be reviewed for impairment whenever events or
II-229
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Savannah Electric and Power Company 1995 Annual Report
changes in circumstances indicate that the carrying amount for an asset may not
be recoverable. This statement also imposes stricter criteria for regulatory
assets by requiring that such assets be probable of future recovery at each
balance sheet date. The Company adopted the new rules January 1, 1996, with no
material effect on the financial statements. However, this conclusion may change
in the future as competitive factors influence wholesale and retail pricing in
the utility industry.
FINANCIAL CONDITION
Overview
The principal change in the Company's financial condition in 1995 was the
addition of $27 million to utility plant. The funds needed for gross property
additions are currently provided from operating activities, principally from
earnings and non-cash charges to income such as depreciation and deferred income
taxes. See Statements of Cash Flows for additional information.
Capital Structure
As of December 31, 1995, the Company's capital structure consisted of 47.1
percent common equity, 9.8 percent preferred stock and 43.1 percent long-term
debt, excluding amounts due within one year. The Company's long-term financial
objective for capitalization ratios is to maintain a capital structure of common
equity at 48 percent, preferred stock at 10 percent and debt at 42 percent.
In May 1995, the Company issued $15 million of first mortgage bonds
maturing in 2025 and $20 million of term notes maturing in 1998. Maturities and
retirements of long-term debt were $29 million in 1995, $5 million in 1994 and
$4 million in 1993.
The composite interest rates and dividend rate for the years 1993 through
1995 as of year-end were as follows:
1995 1994 1993
-------------------------------
Composite interest rates
on long-term debt 7.5% 8.0% 8.0%
Preferred stock dividend rate 6.6% 6.6% 6.6%
===============================================================
The Company's current securities ratings are as follows:
Standard
Moody's & Poor's
------------------------
First Mortgage Bonds A1 A+
Preferred Stock "a2" A
===============================================================
Capital Requirements for Construction
The Company's projected construction expenditures for the next three years total
$86 million ($33 million in 1996, $30 million in 1997, and $23 million in 1998).
Actual construction costs may vary from this estimate because of factors such as
changes in: business conditions; environmental regulations; load projections;
the cost and efficiency of construction labor, equipment and materials; and the
cost of capital. In addition, there can be no assurance that costs related to
capital expenditures will be fully recovered.
Other Capital Requirements
In addition to the funds needed for the construction program, approximately
$21.7 million will be needed by the end of 1998 for maturities of long-term debt
and present sinking fund requirements.
Environmental Matters
In November 1990, the Clean Air Act was signed into law. Title IV of the Clean
Air Act--the acid rain compliance provision of the law--has significantly
impacted the Company and other subsidiaries of The Southern Company. Specific
reductions in sulfur dioxide and nitrogen oxide emissions from fossil-fired
generating plants are required in two phases. Phase I compliance began in 1995
and initially affected 28 generating units of The Southern Company. As a result
of The Southern Company's compliance strategy, an additional 22 generating
units, which included four of the Company's units, were brought into compliance
with Phase I requirements. Phase II compliance is required in 2000, and all
fossil-fired generating plants will be affected.
In 1995, the Environmental Protection Agency (EPA) began issuing annual
sulfur dioxide emission allowances through the allowance trading program. An
II-230
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Savannah Electric and Power Company 1995 Annual Report
emission allowance is the authority to emit one ton of sulfur dioxide during a
calendar year. The method for issuing allowances is based on the fossil fuel
consumed from 1985 through 1987 for each affected generating unit. Emission
allowances are transferable and can be bought, sold, or banked and used in the
future.
The sulfur dioxide emission allowance program is expected to minimize the
cost of compliance. The Southern Company's sulfur dioxide compliance strategy is
designed to use allowances as a compliance option.
The Southern Company achieved Phase I sulfur dioxide compliance at the
affected plants by switching to low-sulfur coal, which required some equipment
upgrades. This compliance strategy resulted in unused emission allowances being
banked for later use. Compliance with nitrogen oxide emission limits was
achieved by the installation of new control equipment at 22 of the original 28
affected generating units. Construction expenditures for Phase I compliance
totaled approximately $320 million through 1995 for The Southern Company, of
which the Company's portion was approximately $2 million.
For Phase II sulfur dioxide compliance, The Southern Company could use
emission allowances banked during Phase I, increase fuel switching, install flue
gas desulfurization equipment at selected plants, and/or purchase more
allowances, depending on the price and availability of allowances. Also, in
Phase II, equipment to control nitrogen oxide emissions will be installed on
additional system fossil-fired plants as required to meet Phase II limits.
Therefore, during the period 1996 to 2000, current compliance strategy could
require total estimated construction expenditures of approximately $150 million
for The Southern Company, of which the Company's portion is approximately $4.1
million. However, the full impact of Phase II compliance cannot now be
determined with certainty, pending the continuing development of a market for
emission allowances, the completion of EPA regulations, and the possibility of
new emission reduction technologies.
An increase of up to 0.7 percent in annual revenue requirements from
customers could be necessary to fully recover the Company's costs of compliance
for both Phase I and Phase II of Title IV of the Clean Air Act. Compliance costs
include construction expenditures, increased costs for switching to low-sulfur
coal, and costs related to emission allowances.
A significant portion of costs related to the acid rain provision of the
Clean Air Act is expected to be recovered through existing ratemaking
provisions. However, there can be no assurance that all Clean Air Act costs will
be recovered.
Title III of the Clean Air Act requires a multi-year EPA study of power
plant emissions of hazardous air pollutants. The EPA is scheduled to submit a
report to Congress on the results of this study during 1996. The report will
include a decision on whether additional regulatory control of these substances
is warranted. Compliance with any new control standards could result in
significant additional costs. The impact of new standards--if any--will depend
on the development and implementation of applicable regulations.
The EPA is evaluating the need to revise the ambient air quality standards
for particulate matter and ozone. The impact of any new standard will depend on
the level chosen for the standard and cannot be determined at this time.
In 1996, the EPA may issue revised rules on air quality control regulations
related to stack height requirements of the Clean Air Act. The full impact of
the final rules cannot be determined at this time, pending their development and
implementation.
In 1993, the EPA issued a ruling confirming the non-hazardous status of
coal ash. However, the EPA has until 1998 to classify co-managed utility
wastes--coal ash and other utility wastes--as either non-hazardous or hazardous.
If the EPA classifies the co-managed wastes as hazardous, then substantial
additional costs for the management of such wastes may be required. The full
impact of any change in the regulatory status will depend on the subsequent
development of co-managed waste requirements.
The Company must comply with other environmental laws and regulations that
cover the handling and disposal of hazardous waste. Under these various laws and
II-231
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Savannah Electric and Power Company 1995 Annual Report
regulations, the Company could incur substantial costs to clean up properties
currently or previously owned. The Company conducts studies to determine the
extent of any required cleanup costs and will recognize in the financial
statements any costs to clean up known sites.
Several major pieces of environmental legislation are being considered for
reauthorization or amendment by Congress. These include: the Clean Air Act; the
Clean Water Act; the Comprehensive Environmental Response, Compensation, and
Liability Act; the Resource Conservation and Recovery Act; the Toxic Substances
Control Act; and the Endangered Species Act. Changes to these laws could affect
many areas of The Southern Company's operations. The full impact of these
requirements cannot be determined at this time, pending the development and
implementation of applicable regulations.
Compliance with possible additional legislation related to global climate
change, electromagnetic fields, and other environmental and health concerns
could significantly affect The Southern Company. The impact of new
legislation--if any--will depend on the subsequent development and
implementation of applicable regulations. In addition, the potential exists for
liability as the result of lawsuits alleging damages caused by electromagnetic
fields.
Sources of Capital
At December 31, 1995, the Company had $0.9 million of cash and $20.5 million of
unused short-term credit arrangements with banks to meet its short-term cash
needs. Revolving credit arrangements of $20 million, which expire December 31,
1998, are also used to meet short-term cash needs and to provide additional
interim funding for the Company's construction program. Of the revolving credit
arrangements, $16 million remained unused at December 31, 1995.
It is anticipated that the funds required for construction and other
purposes, including compliance with environmental regulations, will also be
derived from operations and the sale of additional first mortgage bonds and
preferred stock and capital contributions from The Southern Company. The Company
is required to meet certain earnings coverage requirements specified in its
mortgage indenture and corporate charter to issue new first mortgage bonds and
preferred stock. The Company's coverage ratios are sufficiently high enough to
permit, at present interest rate levels, any foreseeable security sales. The
amount of securities which the Company will be permitted to issue in the future
will depend upon market conditions and other factors prevailing at that time.
II-232
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF INCOME
For the Years Ended December 31, 1995, 1994, and 1993
Savannah Electric and Power Company 1995 Annual Report
<S> <C> <C> <C>
========================================================================================================
1995 1994 1993
- - --------------------------------------------------------------------------------------------------------
(in thousands)
Operating Revenues (Notes 1, 3, and 6):
Revenues $218,529 $205,339 $216,009
Revenues from affiliates 7,200 6,446 2,433
- - --------------------------------------------------------------------------------------------------------
Total operating revenues 225,729 211,785 218,442
- - --------------------------------------------------------------------------------------------------------
Operating Expenses:
Operation --
Fuel 25,386 18,555 24,976
Purchased power from non-affiliates 2,139 1,839 793
Purchased power from affiliates 53,252 55,822 56,274
Other (Notes 1 and 2) 45,214 41,623 45,610
Maintenance 13,668 12,560 13,516
Depreciation and amortization (Note 1) 18,949 17,854 16,467
Taxes other than income taxes 11,465 11,074 11,136
Federal and state income taxes (Notes 1 and 7) 17,378 16,289 15,436
- - --------------------------------------------------------------------------------------------------------
Total operating expenses 187,451 175,616 184,208
- - --------------------------------------------------------------------------------------------------------
Operating Income 38,278 36,169 34,234
Other Income (Expense):
Allowance for equity funds used during construction (Note 1) 163 831 958
Interest income 164 54 209
Other, net (Note 2) (618) (1,032) (1,841)
Income taxes applicable to other income (Notes 1 and 7) 651 864 1,117
- - --------------------------------------------------------------------------------------------------------
Income Before Interest Charges 38,638 36,886 34,677
- - --------------------------------------------------------------------------------------------------------
Interest Charges:
Interest on long-term debt 12,380 12,585 10,696
Allowance for debt funds used during construction (Note 1) (450) (1,225) (699)
Interest on notes payable 135 205 240
Amortization of debt discount, premium, and expense, net 448 550 535
Other interest charges 406 337 340
- - --------------------------------------------------------------------------------------------------------
Net interest charges 12,919 12,452 11,112
- - --------------------------------------------------------------------------------------------------------
Net Income 25,719 24,434 23,565
Dividends on Preferred Stock 2,324 2,324 2,106
- - --------------------------------------------------------------------------------------------------------
Net Income After Dividends on Preferred Stock $ 23,395 $ 22,110 $ 21,459
========================================================================================================
STATEMENTS OF RETAINED EARNINGS
For the Years Ended December 31, 1995, 1994, and 1993
========================================================================================================
1995 1994 1993
- - --------------------------------------------------------------------------------------------------------
(in thousands)
Balance at Beginning of Period $ 99,216 $ 93,479 $ 95,155
Net income after dividends on preferred stock 23,395 22,110 21,459
Cash dividends on common stock (17,600) (16,300) (21,000)
Preferred stock transactions, net 22 (73) (2,135)
- - --------------------------------------------------------------------------------------------------------
Balance at End of Period (Note 11) $105,033 $ 99,216 $ 93,479
========================================================================================================
The accompanying notes are an integral part of these statements.
</TABLE>
II-233
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 1995, 1994, and 1993
Savannah Electric and Power Company 1995 Annual Report
<S> <C> <C> <C>
============================================================================================================================
1995 1994 1993
- - ----------------------------------------------------------------------------------------------------------------------------
(in thousands)
Operating Activities:
Net income $ 25,719 $ 24,434 $ 23,565
Adjustments to reconcile net income to net
cash provided by operating activities --
Depreciation and amortization 20,535 19,353 17,482
Deferred income taxes and investment tax credits 4,359 1,625 607
Allowance for equity funds used during construction (163) (831) (958)
Other, net 35 826 2,853
Changes in certain current assets and liabilities --
Receivables, net (6,241) 18,481 (16,839)
Inventories 2,318 1,144 (3,947)
Payables 2,213 (19,957) 18,742
Other (1,848) (117) 3,282
- - ----------------------------------------------------------------------------------------------------------------------------
Net cash provided from operating activities 46,927 44,958 44,787
- - ----------------------------------------------------------------------------------------------------------------------------
Investing Activities:
Gross property additions (26,503) (30,078) (72,858)
Other 3,198 (841) 1,676
- - ----------------------------------------------------------------------------------------------------------------------------
Net cash used for investing activities (23,305) (30,919) (71,182)
- - ----------------------------------------------------------------------------------------------------------------------------
Financing Activities and Capital Contributions:
Proceeds:
First mortgage bonds 15,000 - 45,000
Preferred stock - - 35,000
Pollution control bonds - - 4,085
Other long-term debt 33,500 8,500 10,000
Retirements:
Preferred stock - - (20,000)
First mortgage bonds (29,250) (5,065) -
Pollution control bonds - - (4,085)
Other long-term debt (23,003) (823) (10,356)
Notes payable, net 1,500 (500) (4,500)
Payment of preferred stock dividends (2,324) (2,129) (2,222)
Payment of common stock dividends (17,600) (16,300) (21,000)
Miscellaneous (2,131) (74) (3,400)
- - ----------------------------------------------------------------------------------------------------------------------------
Net cash provided from (used for) financing activities (24,308) (16,391) 28,522
- - ----------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Cash and Cash Equivalents (686) (2,352) 2,127
Cash and Cash Equivalents at Beginning of Year 1,563 3,915 1,788
- - ----------------------------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Year $ 877 $ 1,563 $ 3,915
============================================================================================================================
Supplemental Cash Flow Information:
Cash paid during the year for-
Interest (net of amount capitalized) $12,775 $11,579 $10,712
Income taxes 11,316 14,441 13,947
- - -----------------------------------------------------------------------------------------------------------------------------
() Denotes use of cash.
The accompanying notes are an integral part of these statements.
</TABLE>
II-234
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
At December 31, 1995 and 1994
Savannah Electric and Power Company 1995 Annual Report
<S> <C> <C>
============================================================================================================
Assets 1995 1994
- - ------------------------------------------------------------------------------------------------------------
(in thousands)
Utility Plant:
Plant in service, at original cost (Notes 1, 4, 5, and 9) $715,146 $693,432
Less accumulated provision for depreciation 287,004 267,590
- - ------------------------------------------------------------------------------------------------------------
428,142 425,842
Construction work in progress 6,707 5,930
- - ------------------------------------------------------------------------------------------------------------
Total 434,849 431,772
- - ------------------------------------------------------------------------------------------------------------
Other Property and Investments 1,788 1,790
- - ------------------------------------------------------------------------------------------------------------
Current Assets:
Cash and cash equivalents 877 1,563
Receivables-
Customer accounts receivable 19,574 17,581
Other accounts and notes receivable 7,251 216
Affiliated companies 614 177
Accumulated provision for uncollectible accounts (983) (866)
Fuel cost under recovery - 3,113
Fossil fuel stock, at average cost 6,076 7,557
Materials and supplies, at average cost (Note 1) 8,239 9,076
Prepayments 6,467 7,446
- - ------------------------------------------------------------------------------------------------------------
Total 48,115 45,863
- - ------------------------------------------------------------------------------------------------------------
Deferred Charges:
Deferred charges related to income taxes (Note 7) 21,557 23,521
Premium on reacquired debt, being amortized 5,316 3,295
Cash surrender value of life insurance for deferred compensation plans 8,560 7,028
Miscellaneous 4,477 5,036
- - ------------------------------------------------------------------------------------------------------------
Total 39,910 38,880
- - ------------------------------------------------------------------------------------------------------------
Total Assets $524,662 $518,305
============================================================================================================
The accompanying notes are an integral part of these statements.
</TABLE>
II-235
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
At December 31, 1995 and 1994
Savannah Electric and Power Company 1995 Annual Report
<S> <C> <C>
=======================================================================================================================
Capitalization and Liabilities 1995 1994
- - -----------------------------------------------------------------------------------------------------------------------
(in thousands)
Capitalization (See accompanying statements):
Common stock equity $167,812 $161,581
Preferred stock 35,000 35,000
Long-term debt 153,679 155,922
- - -----------------------------------------------------------------------------------------------------------------------
Total 356,491 352,503
- - -----------------------------------------------------------------------------------------------------------------------
Current Liabilities:
Amount of securities due within one year (Note 10) 1,407 2,579
Notes payable (Note 5) 4,000 2,500
Accounts payable-
Affiliated companies 5,742 5,162
Other 5,620 3,829
Fuel cost over recovery 865 -
Customer deposits 5,054 4,698
Taxes accrued-
Federal and state income 570 272
Other 1,014 861
Interest accrued 6,331 6,830
Vacation pay accrued 1,916 1,823
Pensions accrued (Note 2) 685 4,783
Miscellaneous 5,185 3,499
- - -----------------------------------------------------------------------------------------------------------------------
Total 38,389 36,836
- - -----------------------------------------------------------------------------------------------------------------------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes (Note 7) 74,152 70,786
Accumulated deferred investment tax credits (Note 7) 13,934 14,637
Deferred credits related to income taxes (Note 7) 24,419 25,487
Deferred compensation plans 7,690 6,807
Deferred under-funded accrued benefit obligation (Note 2) 2,123 3,022
Postretirement benefits 4,728 3,808
Miscellaneous 2,736 4,419
- - -----------------------------------------------------------------------------------------------------------------------
Total 129,782 128,966
- - -----------------------------------------------------------------------------------------------------------------------
Commitments and Contingent Matters (Notes 1, 2, 4, 5, and 9)
Total Capitalization and Liabilities $524,662 $518,305
=======================================================================================================================
The accompanying notes are an integral part of these statements.
</TABLE>
II-236
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CAPITALIZATION
At December 31, 1995 and 1994
Savannah Electric and Power Company 1995 Annual Report
<S> <C> <C> <C> <C>
=========================================================================================================================
1995 1994 1995 1994
- - -------------------------------------------------------------------------------------------------------------------------
(in thousands) (percent of total)
Common Stock Equity (Notes 2 and 11):
Common stock, par value $5 per share --
Authorized -- 16,000,000 shares
Outstanding -- 10,844,635 shares in
1995 and 1994 $ 54,223 $ 54,223
Paid-in capital 8,688 8,688
Additional minimum liability
for under-funded pension obligations (132) (546)
Retained earnings 105,033 99,216
- - -------------------------------------------------------------------------------------------------------------------------
Total common stock equity 167,812 161,581 47.1% 45.8%
- - -------------------------------------------------------------------------------------------------------------------------
Cumulative Preferred Stock (Note 8):
$25 par value --
Authorized -- 2,200,000 shares
6.64% Series -- Outstanding -- 1,400,000 shares 35,000 35,000
- - -------------------------------------------------------------------------------------------------------------------------
Total (annual dividend requirement -- $2,324,000) 35,000 35,000 9.8 9.9
- - -------------------------------------------------------------------------------------------------------------------------
Long-Term Debt (Note 9):
First mortgage bonds --
Maturity Interest Rates
July 1, 2003 6 3/8% 20,000 20,000
October 1, 2019 9 1/4% - 28,950
July 1, 2021 9 3/8% 29,400 29,700
July 1, 2022 8.30% 30,000 30,000
July 1, 2023 7.40% 25,000 25,000
May 1, 2025 7 7/8% 15,000 -
- - -------------------------------------------------------------------------------------------------------------------------
Total first mortgage bonds 119,400 133,650
Pollution control obligations (Note 9) 17,955 17,955
Other long-term debt (Note 9) 20,485 9,988
Unamortized debt premium (discount), net (2,754) (3,092)
- - -------------------------------------------------------------------------------------------------------------------------
Total long-term debt (annual interest
requirement -- $11,916,000) 155,086 158,501
Less amount due within one year (Note 10) 1,407 2,579
- - -------------------------------------------------------------------------------------------------------------------------
Long-term debt excluding amount due within one year 153,679 155,922 43.1 44.3
- - -------------------------------------------------------------------------------------------------------------------------
Total Capitalization $356,491 $352,503 100.0% 100.0%
=========================================================================================================================
The accompanying notes are an integral part of these statements.
</TABLE>
II-237
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Savannah Electric and Power Company 1995 Annual Report
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General
Savannah Electric and Power Company is a wholly owned subsidiary of The Southern
Company, which is the parent company of five operating companies, a system
service company, Southern Communications Services (Southern Communications),
Southern Electric International (Southern Electric), Southern Nuclear Operating
Company (Southern Nuclear), The Southern Development and Investment Group
(Southern Development) and other direct and indirect subsidiaries. The operating
companies provide electric service in four southeastern states. Contracts among
the companies--dealing with jointly owned generating facilities, interconnecting
transmission lines, and the exchange of electric power--are regulated by the
Federal Energy Regulatory Commission (FERC) or the Securities and Exchange
Commission (SEC). The system service company provides, at cost, specialized
services to The Southern Company and subsidiary companies. Southern
Communications provides digital wireless communications services to the
operating companies and also markets these services to the public within the
Southeast. Southern Electric designs, builds, owns, and operates power
production and delivery facilities and provides a broad range of technical
services to industrial companies and utilities in the United States and a number
of international markets. Southern Nuclear provides services to The Southern
Company's nuclear power plants. Southern Development develops new business
opportunities related to energy products and services.
The Southern Company is registered as a holding company under the Public
Utility Holding Company Act of 1935 (PUHCA). Both The Southern Company and its
subsidiaries are subject to the regulatory provisions of the PUHCA. The Company
also is subject to regulation by the FERC and the Georgia Public Service
Commission (GPSC). The Company follows generally accepted accounting principles
and complies with the accounting policies and practices prescribed by the GPSC.
The preparation of financial statements in conformity with generally accepted
accounting principles requires the use of estimates, and the actual results may
differ from those estimates.
Certain prior years' data presented in the financial statements have been
reclassified to conform with current year presentation.
Regulatory Assets and Liabilities
The Company is subject to the provisions of Financial Accounting Standards Board
(FASB) Statement No. 71, Accounting for the Effects of Certain Types of
Regulation. Regulatory assets represent probable future revenues to the Company
associated with certain costs that are expected to be recovered from customers
through the ratemaking process. Regulatory liabilities represent probable future
reductions in revenues associated with amounts that are to be credited to
customers through the ratemaking process. Regulatory assets and (liabilities)
reflected in the Balance Sheets at December 31 relate to:
1995 1994
---------------------------
(in thousands)
Deferred income taxes $ 21,557 $ 23,521
Premium on reacquired debt 5,316 3,295
Deferred income tax credits (24,419) (25,487)
- - ---------------------------------------------------------------
Total $ 2,454 $ 1,329
===============================================================
In the event that a portion of the Company's operations is no longer
subject to the provisions of Statement No. 71, the Company would be required to
write off related regulatory assets and liabilities. In addition, the Company
would be required to determine any impairment to other assets, including plant,
and write down the assets, if impaired, to their fair value.
Revenues and Fuel Costs
The Company accrues revenues for service rendered but unbilled at the end of
each fiscal period. Fuel costs are expensed as the fuel is used. The Company's
electric rates include provisions to adjust billings for fluctuations in fuel
and the energy component of purchased power costs. Revenues are adjusted for
differences between recoverable fuel and demand-side management program costs
and amounts actually recovered in current rates.
The Company has a diversified base of customers. No single customer or
industry comprises 10 percent or more of revenues. In 1995, uncollectible
accounts continued to average less than 1 percent of revenues.
II-238
<PAGE>
NOTES (continued)
Savannah Electric and Power Company 1995 Annual Report
Depreciation and Amortization
Depreciation of the original cost of depreciable utility plant in service is
provided primarily by using composite straight-line rates, which approximated
2.9 percent in 1995, 1994 and 1993. When property subject to depreciation is
retired or otherwise disposed of in the normal course of business, its
cost--together with the cost of removal, less salvage--is charged to the
accumulated provision for depreciation. Minor items of property included in the
original cost of the plant are retired when the related property unit is
retired. Depreciation expense includes an amount for the expected cost of
removal of certain facilities.
Income Taxes
The Company, which is included in the consolidated federal income tax return
filed by The Southern Company, uses the liability method of accounting for
deferred income taxes and provides deferred income taxes for all significant
income tax temporary differences. Investment tax credits utilized are deferred
and amortized to income over the average lives of the related property.
Allowance for Funds Used During Construction
(AFUDC)
AFUDC represents the estimated debt and equity costs of capital funds that are
necessary to finance the construction of new facilities. While cash is not
realized currently from such allowance, it increases the revenue requirement
over the service life of the plant through a higher rate base and higher
depreciation expense. The composite rates used by the Company to calculate AFUDC
were 7.42 percent in 1995, 8.04 percent in 1994 and 8.77 percent in 1993.
Utility Plant
Utility plant is stated at original cost, which includes: materials; labor;
minor items of property; appropriate administrative and general costs;
payroll-related costs such as taxes, pensions, and other benefits; and AFUDC.
The cost of maintenance, repairs, and replacement of minor items of property is
charged to maintenance expense. The cost of replacements of property (exclusive
of minor items of property) is charged to utility plant.
Cash and Cash Equivalents
For purposes of the Statements of Cash Flows, temporary cash investments are
considered cash equivalents. Temporary cash investments are securities with
original maturities of 90 days or less.
Financial Instruments
In accordance with FASB Statement No. 107, Disclosure About Fair Value of
Financial Instruments, the Company's financial instruments that the carrying
amounts did not approximate fair value at December 31 were as follows:
Long-Term Debt
--------------------------
Carrying Fair
Year Amount Value
- - ---- --------------------------
(in millions)
1995 $154 $165
1994 157 153
==============================================================
The fair values for long-term debt were based on either closing market
prices or closing prices of comparable instruments.
Materials and Supplies
Generally, materials and supplies include the cost of transmission,
distribution, and generating plant materials. Materials are charged to inventory
when purchased and then expensed or capitalized to plant, as appropriate, when
installed.
Storm Damage Reserve
In December 1995, in response to a request by the Company, the GPSC issued an
order allowing the Company to establish a Storm Damage Reserve. As of December
31, 1995, the accumulated provision amounted to $0.3 million. Regulatory
treatment by the GPSC allows the Company to accrue up to $0.6 million per year.
II-239
<PAGE>
NOTES (continued)
Savannah Electric and Power Company 1995 Annual Report
2. RETIREMENT BENEFITS
Pension Plan
The Company has a defined benefit, trusteed, non-contributory pension plan that
covers substantially all regular employees. Benefits are based on the greater of
amounts resulting from two different formulas: years of service and final
average pay or years of service and a flat-dollar benefit. The Company uses the
"projected unit credit" actuarial method for funding purposes, subject to
limitations under federal income tax regulations. Amounts funded to the pension
trust are primarily invested in equity and fixed-income securities. FASB
Statement No. 87, Employers' Accounting for Pensions, requires use of the
"projected unit credit" actuarial method for financial reporting purposes.
Postretirement Benefits
The Company also 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 and to the extent required by the GPSC and the
FERC. Amounts funded are primarily invested in debt and equity securities.
FASB Statement No. 106, Employers' Accounting for Postretirement Benefits
Other Than Pensions, requires that medical care and life insurance benefits for
retired employees be accounted for on an accrual basis using a specified
actuarial method, "benefit/years-of-service." The cost of postretirement
benefits is reflected in rates on a current basis.
Funded Status and Cost of Benefits
The following tables show actuarial results and assumptions for pension and
postretirement benefits as computed under the requirements of FASB Statement
Nos. 87 and 106, respectively. The funded status of the plans at December 31 was
as follows:
Pension
------------------------
1995 1994
------------------------
(in thousands)
Actuarial present value of
benefit obligation:
Vested benefits $38,169 $35,227
Non-vested benefits 2,585 2,069
- - ----------------------------------------------------------------
Accumulated benefit obligation 40,754 37,296
Additional amounts related to
projected salary increases 7,786 7,393
- - ----------------------------------------------------------------
Projected benefit obligation 48,540 44,689
Less:
Fair value of plan assets 36,836 27,165
Unrecognized net loss 9,606 10,950
Unrecognized prior service cost 1,375 1,510
Unrecognized net transition
obligation 532 621
Adjustment required to
recognize additional
minimum liability 3,727 5,688
- - ----------------------------------------------------------------
Accrued liability recognized
in the Balance Sheets $ 3,918 $10,131
================================================================
The weighted average rates assumed in the actuarial calculations for the
pension plan were:
1995 1994 1993
------------------------
Discount 7.25% 8.00% 7.50%
Annual salary increase 4.75 5.25 4.75
Long-term return on plan assets 8.75 9.00 9.25
============================================================
In accordance with Statement No. 87, an additional liability related to
under-funded accumulated benefit obligations was reflected at December 31, 1995
and December 31, 1994. Corresponding net-of-tax balances of $0.1 million and
$0.5 million were recognized as separate components of Common Stock Equity in
the 1995 and 1994 Statements of Capitalization.
II-240
<PAGE>
NOTES (continued)
Savannah Electric and Power Company 1995 Annual Report
Postretirement
Benefits
------------------------
1995 1994
------------------------
(in thousands)
Actuarial present value of
benefit obligation:
Retirees and dependents $13,560 $10,994
Employees eligible to retire 1,471 884
Other employees 5,966 8,485
- - -------------------------------------------------------------
Accumulated benefit obligation 20,997 20,363
Less:
Fair value of plan assets 1,443 393
Unrecognized net loss 5,719 3,197
Unrecognized transition
obligation 9,135 13,021
- - -------------------------------------------------------------
Accrued liability recognized in
the Balance Sheets $ 4,700 $ 3,752
=============================================================
In 1995, the Company announced a cost sharing program for postretirement
benefits. The program establishes limits on amounts the Company will pay to
provide future retiree postretirement benefits. This change reduced the 1995
accumulated postretirement benefit obligation by approximately $3.1 million.
The weighted average rates assumed in the actuarial calculations for the
postretirement benefit plans were:
1995 1994
------------------
Discount 7.25% 8.00%
Annual salary increase 4.75 5.50
Long-term return on plan assets 8.50 8.50
===========================================================
An additional assumption used in measuring the accumulated postretirement
benefit obligation was a weighted average medical care cost trend rate of 9.8
percent for 1995, decreasing gradually to 5.3 percent through the year 2005 and
remaining at that level thereafter. An annual increase in the assumed medical
care cost trend rate of 1 percent would increase the accumulated benefit
obligation at December 31, 1995, by $1.3 million and the aggregate of the
service and interest cost components of the net postretirement cost by $0.2
million.
Components of the plans' net costs are shown below:
Pension
------------------------------
1995 1994 1993
------------------------------
(in thousands)
Benefits earned during the year $1,188 $1,192 $1,188
Interest cost on projected
benefit obligation 3,395 3,279 2,741
Actual (return) loss on plan assets (5,791) 27 (2,199)
Net amortization and deferral 4,125 (1,474) 716
- - --------------------------------------------------------------------
Net pension cost $2,917 $3,024 $2,446
====================================================================
Of the above net pension costs, $2.4 million in 1995, $2.6 million in 1994
and $2.0 million in 1993 were recorded in operating expenses, and the remainder
was recorded in construction and other accounts.
Postretirement
Benefits
------------------------------
1995 1994 1993
------------------------------
(in thousands)
Benefits earned during the year $ 504 $ 632 $ 443
Interest cost on accumulated
benefit obligation 1,638 1,492 1,134
Amortization of transition
obligation 723 723 723
Actual (return) loss on plan assets (34) 6 -
Net amortization and deferral 93 111 -
- - --------------------------------------------------------------------
Net postretirement costs $2,924 $2,964 $2,300
====================================================================
Of the above net postretirement costs, $2.4 million in 1995, $2.4 million
in 1994 and $1.8 million in 1993 were recorded in operating expenses, and the
remainder was recorded in construction and other accounts.
The Company has a supplemental retirement plan for certain executive
employees. The plan is unfunded and payable from the general funds of the
Company. The Company has purchased life insurance on participating executives,
and plans to use these policies to satisfy this obligation. Benefit costs
associated with this plan for 1995, 1994 and 1993 were $0.4 million, $0.4
million and $1.0 million, respectively. The 1993 benefit costs reflect a
one-time expense related to employees who were part of the work force reduction
program.
II-241
<PAGE>
NOTES (continued)
Savannah Electric and Power Company 1995 Annual Report
Work Force Reduction Program
In 1993, the Company incurred additional costs for a one-time charge related to
the implementation of a work force reduction program. In 1993, $4.5 million was
charged to operating expenses and $0.6 million was charged to other income
(expense).
3. REGULATORY MATTERS
Rates to retail customers served by the Company are regulated by the GPSC. As
part of the Company's most recent rate settlement in 1992, it was informally
agreed that the Company's earned rate of return on common equity should be 12.95
percent. The Company is currently undergoing an earnings review by the GPSC, and
to date, the GPSC has made no determination.
In August 1995, the GPSC ordered the phase out of the Company's demand-side
management programs effective December 31, 1995 and the elimination of
demand-side management rate riders effective October 1, 1995. The Company will
refund to customers approximately $0.2 million which had been overcollected from
the rate riders as of December 31, 1995.
4. CONSTRUCTION PROGRAM
The Company is engaged in a continuous construction program, currently estimated
to total $33 million in 1996, $30 million in 1997 and $23 million in 1998. The
estimates include AFUDC of $1.0 million in 1996, $0.9 million in 1997 and $0.2
million in 1998. The construction program is subject to periodic review and
revision, and actual construction costs may vary from the above estimates
because of numerous factors. These factors include: changes in business
conditions; revised load growth estimates; changes in environmental regulations;
increasing cost of labor, equipment and materials; and changes in cost of
capital. The construction of two combustion turbine peaking units totaling 160
megawatts was completed during 1994. The Company does not have any new baseload
generating plants under construction. However, construction related to
transmission and distribution facilities and the upgrading and extension of the
useful lives of generating plants will continue.
5. FINANCING AND COMMITMENTS
General
To the extent possible, the Company's construction program is expected to be
financed from internal sources and from the issuance of additional long-term
debt, preferred stock and capital contributions from The Southern Company.
The amounts of long-term debt and preferred stock that can be issued in the
future will be contingent on market conditions, the maintenance of adequate
earnings levels, regulatory authorizations and other factors.
Bank Credit Arrangements
At the beginning of 1996, unused credit arrangements with five banks totaled
$20.5 million and expire at various times during 1996.
The Company's revolving credit arrangements of $20 million, of which $16
million remained unused as of December 31, 1995, expire December 31, 1998. These
agreements allow short-term borrowings to be converted into term loans, payable
in 12 equal quarterly installments, with the first installment due at the end of
the first calendar quarter after the applicable termination date or at an
earlier date at the Company's option.
In connection with these credit arrangements, the Company agrees to pay
commitment fees based on the unused portions of the commitments.
Assets Subject to Lien
As amended and supplemented, the Company's Indenture of Mortgage, which secures
the first mortgage bonds issued by the Company, constitutes a direct first lien
on substantially all of the Company's fixed property and franchises.
II-242
<PAGE>
NOTES (continued)
Savannah Electric and Power Company 1995 Annual Report
Operating Leases
The Company has rental agreements with various terms and expiration dates.
Rental expenses totaled $1.3 million for 1995 and $1.5 million for 1994 and
1993. The Company entered into a 22.5 year lease agreement effective December 1,
1995 for 100 new aluminum rail cars at an annual cost of approximately $0.5
million. The rail cars are used to transport coal to the Company's generating
plants.
At December 31, 1995, estimated future minimum lease payments for
non-cancelable operating leases were as follows:
Amounts
--------------------
(in millions)
1996 $1.6
1997 1.4
1998 1.1
1999 0.5
2000 0.5
2001 and thereafter 8.4
=============================================================
6. LONG-TERM POWER SALES AGREEMENTS
The operating subsidiaries of The Southern Company, including the Company, have
long-term contractual agreements for the sale of capacity and energy to certain
non-affiliated utilities located outside the system's service area. The
agreements for non-firm capacity expired in 1994. Other agreements are firm and
pertain to capacity related to specific generating units. Because energy is
generally sold at cost under these agreements, revenues from capacity sales
primarily affect profitability. The Company's portion of capacity revenues has
been as follows:
Unit Other
Year Power Long-Term Total
- - ----------- -----------------------------------------
(in thousands)
1995 $3 $ - $ 3
1994 3 445 448
1993 2 976 978
===============================================================
7. INCOME TAXES
Effective January 1, 1993, the Company adopted FASB Statement No. 109,
Accounting for Income Taxes. The adoption resulted in the recording of
additional deferred income taxes and related regulatory assets and liabilities.
At December 31, 1995, the tax-related regulatory assets and liabilities were $22
million and $24 million, respectively. These assets are attributable to tax
benefits flowed through to customers in prior years and to taxes applicable to
capitalized AFUDC. These liabilities are attributable to deferred taxes
previously recognized at rates higher than current enacted tax law and to
unamortized investment tax credits.
Details of the federal and state income tax provisions are as follows:
1995 1994 1993
--------------------------------
(in thousands)
Total provision for income taxes
Federal --
Currently payable $10,427 $11,736 $11,663
Deferred -- current year 5,290 2,106 1,906
-- reversal of
prior years (1,661) (755) (1,383)
- - -----------------------------------------------------------------
14,056 13,087 12,186
- - -----------------------------------------------------------------
State --
Currently payable 1,941 2,064 2,049
Deferred -- current year 695 188 119
-- reversal of
prior years 35 86 (35)
- - -----------------------------------------------------------------
2,671 2,338 2,133
- - -----------------------------------------------------------------
Total 16,727 15,425 14,319
Less income taxes charged
(credited) to other income (651) (864) (1,117)
- - -----------------------------------------------------------------
Federal and state income taxes
charged to operations $17,378 $16,289 $15,436
=================================================================
The tax effects of temporary differences between the carrying amounts of
assets and liabilities in the financial statements and their respective tax
bases, which give rise to deferred tax assets and liabilities, are as follows:
II-243
<PAGE>
NOTES (continued)
Savannah Electric and Power Company 1995 Annual Report
1995 1994
--------- ----------
Deferred tax liabilities: (in thousands)
Accelerated depreciation $62,822 $57,830
Property basis differences 11,330 12,956
Other 1,511 2,449
- - ----------------------------------------------------------------
Total 75,663 73,235
- - ----------------------------------------------------------------
Deferred tax assets:
Pension and other benefits 3,660 4,816
Other 3,818 3,959
- - ----------------------------------------------------------------
Total 7,478 8,775
- - ----------------------------------------------------------------
Net deferred tax liabilities 68,185 64,460
Portions included in current assets, net 5,967 6,326
- - ----------------------------------------------------------------
Accumulated deferred income taxes
in the Balance Sheets $74,152 $70,786
================================================================
Deferred investment tax credits are amortized over the life of the related
property with such amortization normally applied as a credit to reduce
depreciation in the Statements of Income. Credits amortized in this manner
amounted to $0.7 million in 1995, 1994 and 1993. At December 31, 1995, all
investment tax credits available to reduce federal income taxes payable had been
utilized.
A reconciliation of the federal statutory income tax rate to the effective
income tax rate is as follows:
1995 1994 1993
----------------------------
Federal statutory tax rate 35% 35% 35%
State income tax, net of
federal income tax benefit 4 4 4
Other - - (1)
-------------------------------------------------------------
Effective income tax rate 39% 39% 38%
=============================================================
The Southern Company files a consolidated federal income tax return. Under
a joint consolidated income tax agreement, each subsidiary's current and
deferred tax expense is computed on a stand-alone basis. Tax benefits from
losses of the parent company are allocated to each subsidiary based on the ratio
of taxable income to total consolidated taxable income.
8. CUMULATIVE PREFERRED STOCK
In 1993, the Company issued 1,400,000 shares of 6.64% Series Preferred Stock
which has redemption provisions of $26.66 per share plus accrued dividends if on
or prior to November 1, 1998, and redemption provisions of $25 per share plus
accrued dividends thereafter. Cumulative preferred stock dividends are
preferential to the payment of dividends on common stock.
9. LONG-TERM DEBT
The Company's Indenture related to its First Mortgage Bonds is unlimited as to
the authorized amount of bonds which may be issued, provided that required
property additions, earnings and other provisions of such Indenture are met.
In May 1995, the Company issued $15 million of first mortgage bonds
maturing in 2025 and $20 million of term notes maturing in 1998. Using the
proceeds from such sales, the Company redeemed in June 1995 all of its remaining
outstanding 9 1/4% Series First Mortgage Bonds due October 2019.
The sinking fund requirements of first mortgage bonds were satisfied by
cash redemption in 1994 and 1995. Sinking fund requirements and/or maturities
through 2000 applicable to long-term debt are as follows: $1.4 million in 1996;
$0.2 million in 1997; $20.1 million in 1998; and no requirements in 1999 and
2000.
Details of pollution control obligations and other long-term debt at
December 31 are as follows:
1995 1994
---------------------
(in thousands)
Collateralized obligations incurred
in connection with the sale by public
authorities of tax-exempt pollution
control revenue bonds --
Variable rate (5.15% at 1/1/96)
due 2016 $ 4,085 $ 4,085
6 3/4% due 2022 13,870 13,870
Capital lease obligations --
Combustion turbine equipment - 980
Transportation fleet 485 508
Notes Payable --
6.04% due 1995 - 3,500
6.035% due 1995 - 5,000
Variable rate (5.85% at 1/1/96)
due 1998 15,000
Variable rate (5.84% at 1/1/96)
due 1998 5,000
- - ----------------------------------------------------------------
Total $38,440 $27,943
================================================================
II-244
<PAGE>
NOTES (continued)
Savannah Electric and Power Company 1995 Annual Report
Assets acquired under capital leases are recorded as utility plant in
service, and the related obligation is classified as other long-term debt.
Leases are capitalized at the net present value of the future lease payments.
However, for ratemaking purposes, these obligations are treated as operating
leases, and as such, lease payments are charged to expense as incurred.
The Company leased combustion turbine generating equipment under a
non-cancelable lease that expired in 1995. In December 1995, the Company
exercised its option to purchase this equipment. The Company currently leases a
portion of its transportation fleet. Under the terms of these leases, the
Company is responsible for taxes, insurance and other expenses.
10. LONG-TERM DEBT DUE WITHIN ONE YEAR
A summary of the sinking fund requirements and scheduled maturities and
redemptions of long-term debt due within one year at December 31 is as follows:
1995 1994
----------------------
(in thousands)
Bond sinking fund requirement $1,200 $1,350
Less:
Portion to be satisfied by
certifying property additions - -
- - --------------------------------------------------------------------
Cash sinking fund requirement 1,200 1,350
Other long-term debt maturities (Note 9) 207 1,229
- - --------------------------------------------------------------------
Total $1,407 $2,579
====================================================================
The first mortgage bond improvement (sinking) fund requirements amount to 1
percent of each outstanding series of bonds authenticated under the Indenture
prior to January 1 of each year, other than those issued to collateralize
pollution control and other obligations. The requirements may be satisfied by
depositing cash or reacquiring bonds, or by pledging additional property equal
to 1 2/3 times the requirements. In January 1996, the Company satisfied its 1996
sinking fund requirement of $1.2 million by cash redemption.
11. COMMON STOCK DIVIDEND RESTRICTIONS
The Company's Charter and Indenture contain certain limitations on the payment
of cash dividends on preferred and common stocks. At December 31, 1995,
approximately $62 million of retained earnings was restricted against the
payment of cash dividends on common stock under the terms of the Indenture.
12. QUARTERLY FINANCIAL INFORMATION (Unaudited)
Summarized quarterly financial data for 1995 and 1994 are as follows (in
thousands):
Net Income After
Operating Operating Dividends on
Quarter Ended Revenue Income Preferred Stock
- - ------------------- ------------ ------------ -------------------
March 1995 $46,743 $ 6,468 $ 2,420
June 1995 57,673 9,920 6,041
September 1995 73,449 16,438 12,693
December 1995 47,864 5,452 2,241
March 1994 $46,717 $ 7,130 $ 3,898
June 1994 56,377 9,555 6,051
September 1994 63,674 13,495 9,547
December 1994 45,017 5,989 2,614
=================================================================
The Company's business is influenced by seasonal weather conditions and a
seasonal rate structure, among other factors.
II-245
<PAGE>
<TABLE>
<CAPTION>
SELECTED FINANCIAL AND OPERATING DATA
Savannah Electric and Power Company 1995 Annual Report
<S> <C> <C> <C>
==================================================================================================================
1995 1994 1993
- - ------------------------------------------------------------------------------------------------------------------
Operating Revenues (in thousands) $225,729 $211,785 $218,442
Net Income after Dividends
on Preferred and Preference Stocks (in thousands) $23,395 $22,110 $21,459
Cash Dividends on Common Stock (in thousands) $17,600 $16,300 $21,000
Return on Average Common Equity (percent) 14.20 14.00 13.73
Total Assets (in thousands) $524,662 $518,305 $527,187
Gross Property Additions (in thousands) $26,503 $30,078 $72,858
- - -----------------------------------------------------------------------------------------------------------------
Capitalization (in thousands):
Common stock equity $167,812 $161,581 $154,269
Preferred stock 35,000 35,000 35,000
Preferred and preference stock subject
to mandatory redemption - - -
Long-term debt 153,679 155,922 151,338
- - -----------------------------------------------------------------------------------------------------------------
Total (excluding amounts due within one year) $356,491 $352,503 $340,607
=================================================================================================================
Capitalization Ratios (percent):
Common stock equity 47.1 45.8 45.3
Preferred and preference stock 9.8 9.9 10.3
Long-term debt 43.1 44.3 44.4
- - -----------------------------------------------------------------------------------------------------------------
Total (excluding amounts due within one year) 100.0 100.0 100.0
=================================================================================================================
First Mortgage Bonds (in thousands):
Issued 15,000 - 45,000
Retired 29,250 5,065 -
Preferred and Preference Stock (in thousands):
Issued - - 35,000
Retired - - 20,000
- - -----------------------------------------------------------------------------------------------------------------
Security Ratings:
First Mortgage Bonds -
Moody's A1 A1 A1
Standard and Poor's A+ A A
Preferred Stock -
Moody's "a2" "a2" "a2"
Standard and Poor's A A- A-
- - -----------------------------------------------------------------------------------------------------------------
Customers (year-end):
Residential 104,624 103,199 101,032
Commercial 13,339 13,015 12,702
Industrial 65 65 69
Other 1,048 1,007 957
- - -----------------------------------------------------------------------------------------------------------------
Total 119,076 117,286 114,760
=================================================================================================================
Employees (year-end) 584 616 665
Note:
NR = Not Rated
</TABLE>
II-246
<PAGE>
<TABLE>
<CAPTION>
SELECTED FINANCIAL AND OPERATING DATA
Savannah Electric and Power Company 1995 Annual Report
<S> <C> <C> <C>
=================================================================================================================
1992 1991 1990
- - -----------------------------------------------------------------------------------------------------------------
Operating Revenues (in thousands) $197,761 $189,646 $205,635
Net Income after Dividends
on Preferred and Preference Stocks (in thousands) $20,512 $24,030 $26,254
Cash Dividends on Common Stock (in thousands) $22,000 $22,000 $22,000
Return on Average Common Equity (percent) 12.89 15.13 16.85
Total Assets (in thousands) $352,175 $352,505 $340,050
Gross Property Additions (in thousands) $30,132 $19,478 $20,086
- - -----------------------------------------------------------------------------------------------------------------
Capitalization (in thousands):
Common stock equity $158,376 $159,841 $157,811
Preferred stock 20,000 20,000 20,000
Preferred and preference stock subject
to mandatory redemption - - -
Long-term debt 110,767 119,280 112,377
- - -----------------------------------------------------------------------------------------------------------------
Total (excluding amounts due within one year) $289,143 $299,121 $290,188
=================================================================================================================
Capitalization Ratios (percent):
Common stock equity 54.8 53.4 54.4
Preferred and preference stock 6.9 6.7 6.9
Long-term debt 38.3 39.9 38.7
- - -----------------------------------------------------------------------------------------------------------------
Total (excluding amounts due within one year) 100.0 100.0 100.0
=================================================================================================================
First Mortgage Bonds (in thousands):
Issued 30,000 30,000 -
Retired 38,750 22,500 9,135
Preferred and Preference Stock (in thousands):
Issued - - -
Retired - - 5,374
- - -----------------------------------------------------------------------------------------------------------------
Security Ratings:
First Mortgage Bonds -
Moody's A1 A1 A1
Standard and Poor's A A A
Preferred Stock -
Moody's "a2" "a2" "a2"
Standard and Poor's A- A- A-
- - -----------------------------------------------------------------------------------------------------------------
Customers (year-end):
Residential 99,164 97,446 96,452
Commercial 12,416 12,153 12,045
Industrial 73 73 76
Other 940 897 867
- - -----------------------------------------------------------------------------------------------------------------
Total 112,593 110,569 109,440
=================================================================================================================
Employees (year-end) 688 672 648
Note:
NR = Not Rated
</TABLE>
II-247A
<PAGE>
<TABLE>
<CAPTION>
SELECTED FINANCIAL AND OPERATING DATA
Savannah Electric and Power Company 1995 Annual Report
<S> <C> <C> <C>
================================================================================================================
1989 1988 1987
- - ----------------------------------------------------------------------------------------------------------------
Operating Revenues (in thousands) $201,799 $182,440 $174,707
Net Income after Dividends
on Preferred and Preference Stocks (in thousands) $25,535 $24,272 $22,086
Cash Dividends on Common Stock (in thousands) $20,000 $11,700 $10,741
Return on Average Common Equity (percent) 16.88 17.03 17.03
Total Assets (in thousands) $349,887 $347,051 $340,109
Gross Property Additions (in thousands) $18,831 $23,254 $32,276
- - ----------------------------------------------------------------------------------------------------------------
Capitalization (in thousands):
Common stock equity $153,737 $148,883 $136,207
Preferred stock 22,300 22,300 2,300
Preferred and preference stock subject
to mandatory redemption 2,884 3,075 9,665
Long-term debt 117,522 98,285 129,329
- - ----------------------------------------------------------------------------------------------------------------
Total (excluding amounts due within one year) $296,443 $272,543 $277,501
================================================================================================================
Capitalization Ratios (percent):
Common stock equity 51.9 54.6 49.1
Preferred and preference stock 8.5 9.3 4.3
Long-term debt 39.6 36.1 46.6
- - ----------------------------------------------------------------------------------------------------------------
Total (excluding amounts due within one year) 100.0 100.0 100.0
================================================================================================================
First Mortgage Bonds (in thousands):
Issued 30,000 - -
Retired 18,275 12,231 10,239
Preferred and Preference Stock (in thousands):
Issued - 20,000 -
Retired 6,591 553 588
- - ----------------------------------------------------------------------------------------------------------------
Security Ratings:
First Mortgage Bonds -
Moody's A1 A1 A3
Standard and Poor's A A- A-
Preferred Stock -
Moody's "a2" "a2" NR
Standard and Poor's A- BBB+ BBB+
- - ----------------------------------------------------------------------------------------------------------------
Customers (year-end):
Residential 94,766 93,486 92,094
Commercial 12,298 12,135 11,812
Industrial 69 69 67
Other 856 828 762
- - ----------------------------------------------------------------------------------------------------------------
Total 107,989 106,518 104,735
================================================================================================================
Employees (year-end) 643 655 655
Note:
NR = Not Rated
</TABLE>
II-247B
<PAGE>
<TABLE>
<CAPTION>
SELECTED FINANCIAL AND OPERATING DATA
Savannah Electric and Power Company 1995 Annual Report
<S> <C> <C>
================================================================================================
1986 1985
- - ------------------------------------------------------------------------------------------------
Operating Revenues (in thousands) $174,847 $158,643
Net Income after Dividends
on Preferred and Preference Stocks (in thousands) $20,452 $15,279
Cash Dividends on Common Stock (in thousands) $9,353 $8,387
Return on Average Common Equity (percent) 17.52 14.41
Total Assets (in thousands) $341,826 $323,686
Gross Property Additions (in thousands) $26,800 $30,700
- - ------------------------------------------------------------------------------------------------
Capitalization (in thousands):
Common stock equity $123,133 $110,385
Preferred stock 2,300 2,300
Preferred and preference stock subject
to mandatory redemption 10,256 10,848
Long-term debt 137,821 128,850
- - ------------------------------------------------------------------------------------------------
Total (excluding amounts due within one year) $273,510 $252,383
================================================================================================
Capitalization Ratios (percent):
Common stock equity 45.0 43.7
Preferred and preference stock 4.6 5.2
Long-term debt 50.4 51.1
- - ------------------------------------------------------------------------------------------------
Total (excluding amounts due within one year) 100.0 100.0
================================================================================================
First Mortgage Bonds (in thousands):
Issued 25,000 20,000
Retired 10,160 5,592
Preferred and Preference Stock (in thousands):
Issued - -
Retired 610 588
- - ------------------------------------------------------------------------------------------------
Security Ratings:
First Mortgage Bonds -
Moody's A3 A3
Standard and Poor's A- A-
Preferred Stock -
Moody's NR NR
Standard and Poor's BBB+ BBB+
- - ------------------------------------------------------------------------------------------------
Customers (year-end):
Residential 89,951 88,101
Commercial 11,405 10,985
Industrial 67 66
Other 731 699
- - ------------------------------------------------------------------------------------------------
Total 102,154 99,851
================================================================================================
Employees (year-end) 658 653
Note:
NR = Not Rated
</TABLE>
II-247C
<PAGE>
<TABLE>
<CAPTION>
SELECTED FINANCIAL AND OPERATING DATA (continued)
Savannah Electric and Power Company 1995 Annual Report
<S> <C> <C> <C>
===============================================================================================================
1995 1994 1993
- - ---------------------------------------------------------------------------------------------------------------
Operating Revenues (in thousands):
Residential $95,208 $89,195 $93,883
Commercial 75,117 71,227 71,320
Industrial 36,040 32,906 36,180
Other 8,386 7,946 7,810
- - ---------------------------------------------------------------------------------------------------------------
Total retail 214,751 201,274 209,193
Sales for resale - non-affiliates 1,851 4,786 6,021
Sales for resale - affiliates 7,200 6,446 2,433
- - ---------------------------------------------------------------------------------------------------------------
Total revenues from sales of electricity 223,802 212,506 217,647
Other revenues 1,927 (721) 795
- - ---------------------------------------------------------------------------------------------------------------
Total $225,729 $211,785 $218,442
===============================================================================================================
Kilowatt-Hour Sales (in thousands):
Residential 1,402,148 1,298,122 1,329,362
Commercial 1,099,570 1,045,831 1,015,935
Industrial 887,141 799,543 854,324
Other 126,057 119,593 115,969
- - ---------------------------------------------------------------------------------------------------------------
Total retail 3,514,916 3,263,089 3,315,590
Sales for resale - non-affiliates 87,747 201,716 247,203
Sales for resale - affiliates 63,731 93,001 75,384
- - ---------------------------------------------------------------------------------------------------------------
Total 3,666,394 3,557,806 3,638,177
===============================================================================================================
Average Revenue Per Kilowatt-Hour (cents):
Residential 6.79 6.87 7.06
Commercial 6.83 6.81 7.02
Industrial 4.06 4.12 4.23
Total retail 6.11 6.17 6.31
Sale for resale 5.98 3.81 2.62
Total sales 6.10 5.97 5.98
Residential Average Annual Kilowatt-Hour Use Per Customer 13,478 12,686 13,269
Residential Average Annual Revenue Per Customer $915.15 $871.68 $937.07
Plant Nameplate Capacity Ratings (year-end) (megawatts) 788 788 628
Maximum Peak-Hour Demand (megawatts):
Winter 630 617 524
Summer 811 729 747
Annual Load Factor (percent) 52.9 54.3 54.1
Plant Availability - Fossil-Steam (percent) 83.3 81.0 90.2
- - ---------------------------------------------------------------------------------------------------------------
Source of Energy Supply (percent):
Coal 23.9 18.6 21.5
Oil and gas 5.9 1.8 4.5
Purchased power -
From non-affiliates 2.3 1.5 0.9
From affiliates 67.9 78.1 73.1
- - ---------------------------------------------------------------------------------------------------------------
Total 100.0 100.0 100.0
===============================================================================================================
Total Fuel Economy Data:
BTU per net kilowatt-hour generated 12,146 11,786 11,515
Cost of fuel per million BTU (cents) 179.25 205.03 215.97
Average cost of fuel per net kilowatt-hour generated (cents) 2.18 2.42 2.49
===============================================================================================================
</TABLE>
II-248
<PAGE>
<TABLE>
<CAPTION>
SELECTED FINANCIAL AND OPERATING DATA (continued)
Savannah Electric and Power Company 1995 Annual Report
<S> <C> <C> <C>
=================================================================================================================
1992 1991 1990
- - -----------------------------------------------------------------------------------------------------------------
Operating Revenues (in thousands):
Residential $82,670 $80,541 $87,063
Commercial 64,756 61,827 65,462
Industrial 33,171 30,492 30,237
Other 7,095 6,561 6,782
- - -----------------------------------------------------------------------------------------------------------------
Total retail 187,692 179,421 189,544
Sales for resale - non-affiliates 7,821 7,813 9,482
Sales for resale - affiliates 1,505 1,430 5,566
- - -----------------------------------------------------------------------------------------------------------------
Total revenues from sales of electricity 197,018 188,664 204,592
Other revenues 743 982 1,043
- - -----------------------------------------------------------------------------------------------------------------
Total $197,761 $189,646 $205,635
=================================================================================================================
Kilowatt-Hour Sales (in thousands):
Residential 1,216,993 1,195,005 1,183,486
Commercial 953,840 925,757 892,931
Industrial 861,121 825,862 644,704
Other 110,270 106,683 103,539
- - -----------------------------------------------------------------------------------------------------------------
Total retail 3,142,224 3,053,307 2,824,660
Sales for resale - non-affiliates 367,066 372,085 441,090
Sales for resale - affiliates 37,632 32,581 294,042
- - -----------------------------------------------------------------------------------------------------------------
Total 3,546,922 3,457,973 3,559,792
=================================================================================================================
Average Revenue Per Kilowatt-Hour (cents):
Residential 6.79 6.74 7.36
Commercial 6.79 6.68 7.33
Industrial 3.85 3.69 4.69
Total retail 5.97 5.88 6.71
Sale for resale 2.30 2.28 2.05
Total sales 5.55 5.46 5.75
Residential Average Annual Kilowatt-Hour Use Per Customer 12,369 12,323 12,339
Residential Average Annual Revenue Per Customer $840.23 $830.54 $907.68
Plant Nameplate Capacity Ratings (year-end) (megawatts) 628 605 605
Maximum Peak-Hour Demand (megawatts):
Winter 533 526 428
Summer 695 691 648
Annual Load Factor (percent) 55.0 54.1 53.2
Plant Availability - Fossil-Steam (percent) 89.1 76.9 89.6
- - -----------------------------------------------------------------------------------------------------------------
Source of Energy Supply (percent):
Coal 12.0 16.3 52.8
Oil and gas 2.9 1.7 3.4
Purchased power -
From non-affiliates 1.0 0.4 0.8
From affiliates 84.1 81.6 43.0
- - -----------------------------------------------------------------------------------------------------------------
Total 100.0 100.0 100.0
=================================================================================================================
Total Fuel Economy Data:
BTU per net kilowatt-hour generated 12,547 10,917 10,741
Cost of fuel per million BTU (cents) 201.50 199.42 188.18
Average cost of fuel per net kilowatt-hour generated (cents) 2.53 2.18 2.02
=================================================================================================================
</TABLE>
II-249A
<PAGE>
<TABLE>
<CAPTION>
SELECTED FINANCIAL AND OPERATING DATA (continued)
Savannah Electric and Power Company 1995 Annual Report
<S> <C> <C> <C>
=============================================================================================================
1989 1988 1987
- - -------------------------------------------------------------------------------------------------------------
Operating Revenues (in thousands):
Residential $85,113 $81,098 $79,785
Commercial 65,474 62,640 60,285
Industrial 28,304 26,865 27,422
Other 6,892 6,557 6,315
- - -------------------------------------------------------------------------------------------------------------
Total retail 185,783 177,160 173,807
Sales for resale - non-affiliates 8,814 808 -
Sales for resale - affiliates 6,025 3,567 -
- - -------------------------------------------------------------------------------------------------------------
Total revenues from sales of electricity 200,622 181,535 173,807
Other revenues 1,177 905 900
- - -------------------------------------------------------------------------------------------------------------
Total $201,799 $182,440 $174,707
=============================================================================================================
Kilowatt-Hour Sales (in thousands):
Residential 1,109,976 1,067,411 1,044,554
Commercial 839,756 806,687 775,643
Industrial 561,063 533,604 557,281
Other 101,164 97,072 94,949
- - -------------------------------------------------------------------------------------------------------------
Total retail 2,611,959 2,504,774 2,472,427
Sales for resale - non-affiliates 437,943 24,168 -
Sales for resale - affiliates 303,142 156,106 -
- - -------------------------------------------------------------------------------------------------------------
Total 3,353,044 2,685,048 2,472,427
=============================================================================================================
Average Revenue Per Kilowatt-Hour (cents):
Residential 7.67 7.60 7.64
Commercial 7.80 7.77 7.77
Industrial 5.04 5.03 4.92
Total retail 7.11 7.07 7.03
Sale for resale 2.00 2.43 -
Total sales 5.98 6.76 7.03
Residential Average Annual Kilowatt-Hour Use Per Customer 11,781 11,489 11,481
Residential Average Annual Revenue Per Customer $903.37 $872.87 $876.95
Plant Nameplate Capacity Ratings (year-end) (megawatts) 605 605 605
Maximum Peak-Hour Demand (megawatts):
Winter 548 471 414
Summer 613 574 562
Annual Load Factor (percent) 52.4 53.4 53.6
Plant Availability - Fossil-Steam (percent) 94.7 77.1 81.2
- - -------------------------------------------------------------------------------------------------------------
Source of Energy Supply (percent):
Coal 63.5 79.8 74.3
Oil and gas 1.4 5.4 4.4
Purchased power -
From non-affiliates 1.5 5.9 19.9
From affiliates 33.6 8.9 1.4
- - -------------------------------------------------------------------------------------------------------------
Total 100.0 100.0 100.0
=============================================================================================================
Total Fuel Economy Data:
BTU per net kilowatt-hour generated 10,611 10,683 10,551
Cost of fuel per million BTU (cents) 180.48 178.31 176.10
Average cost of fuel per net kilowatt-hour generated (cents) 1.92 1.90 1.86
=============================================================================================================
</TABLE>
II-249B
<PAGE>
<TABLE>
<CAPTION>
SELECTED FINANCIAL AND OPERATING DATA (continued)
Savannah Electric and Power Company 1995 Annual Report
<S> <C> <C>
============================================================================================
1986 1985
- - --------------------------------------------------------------------------------------------
Operating Revenues (in thousands):
Residential $80,348 $70,377
Commercial 59,547 53,696
Industrial 27,694 28,335
Other 6,300 5,823
- - --------------------------------------------------------------------------------------------
Total retail 173,889 158,231
Sales for resale - non-affiliates - -
Sales for resale - affiliates - -
- - --------------------------------------------------------------------------------------------
Total revenues from sales of electricity 173,889 158,231
Other revenues 958 412
- - --------------------------------------------------------------------------------------------
Total $174,847 $158,643
============================================================================================
Kilowatt-Hour Sales (in thousands):
Residential 1,021,905 926,988
Commercial 746,133 694,168
Industrial 515,544 513,270
Other 92,471 87,238
- - --------------------------------------------------------------------------------------------
Total retail 2,376,053 2,221,664
Sales for resale - non-affiliates - -
Sales for resale - affiliates - -
- - --------------------------------------------------------------------------------------------
Total 2,376,053 2,221,664
============================================================================================
Average Revenue Per Kilowatt-Hour (cents):
Residential 7.86 7.59
Commercial 7.98 7.74
Industrial 5.37 5.52
Total retail 7.32 7.12
Sale for resale - -
Total sales 7.32 7.12
Residential Average Annual Kilowatt-Hour Use Per Customer 11,514 10,536
Residential Average Annual Revenue Per Customer $905.27 $799.90
Plant Nameplate Capacity Ratings (year-end) (megawatts) 605 605
Maximum Peak-Hour Demand (megawatts):
Winter 464 440
Summer 565 498
Annual Load Factor (percent) 51.1 54.7
Plant Availability - Fossil-Steam (percent) 86.9 92.0
- - --------------------------------------------------------------------------------------------
Source of Energy Supply (percent):
Coal 81.9 87.5
Oil and gas 6.8 2.6
Purchased power -
From non-affiliates 11.3 9.9
From affiliates - -
- - --------------------------------------------------------------------------------------------
Total 100.0 100.0
============================================================================================
Total Fuel Economy Data:
BTU per net kilowatt-hour generated 10,607 10,581
Cost of fuel per million BTU (cents) 186.30 198.80
Average cost of fuel per net kilowatt-hour generated (cents) 1.98 2.10
============================================================================================
</TABLE>
II-249C
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF INCOME
Savannah Electric and Power Company
=========================================================================================================================
For the Years Ended December 31, 1995 1994 1993
- - -------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
Operating Revenues:
Revenues $ 218,529 $ 205,339 $ 216,009
Revenues from affiliates 7,200 6,446 2,433
- - -------------------------------------------------------------------------------------------------------------------------
Total operating revenues 225,729 211,785 218,442
- - -------------------------------------------------------------------------------------------------------------------------
Operating Expenses:
Operation --
Fuel 25,386 18,555 24,976
Purchased power from non-affiliates 2,139 1,839 793
Purchased power from affiliates 53,252 55,822 56,274
Other 45,214 41,623 45,610
Maintenance 13,668 12,560 13,516
Depreciation and amortization 18,949 17,854 16,467
Taxes other than income taxes 11,465 11,074 11,136
Federal and state income taxes 17,378 16,289 15,436
- - -------------------------------------------------------------------------------------------------------------------------
Total operating expenses 187,451 175,616 184,208
- - -------------------------------------------------------------------------------------------------------------------------
Operating Income 38,278 36,169 34,234
Other Income (Expense):
Allowance for equity funds used during construction 163 831 958
Interest income 164 54 209
Other, net (618) (1,032) (1,841)
Income taxes applicable to other income 651 864 1,117
- - -------------------------------------------------------------------------------------------------------------------------
Income Before Interest Charges 38,638 36,886 34,677
- - -------------------------------------------------------------------------------------------------------------------------
Interest Charges:
Interest on long-term debt 12,380 12,585 10,696
Allowance for debt funds used during construction (450) (1,225) (699)
Interest on notes payable 135 205 240
Amortization of debt discount, premium, and expense, net 448 550 535
Other interest charges 406 337 340
- - -------------------------------------------------------------------------------------------------------------------------
Net interest charges 12,919 12,452 11,112
- - -------------------------------------------------------------------------------------------------------------------------
Income Before Cumulative Effect of a
Change in Method of Recording Revenues 25,719 24,434 23,565
Cumulative effect as of January 1, 1988, of accruing unbilled
revenues--less income taxes of $1,164(000) - - -
- - -------------------------------------------------------------------------------------------------------------------------
Net Income 25,719 24,434 23,565
Dividends on Preferred and Preference Stock 2,324 2,324 2,106
- - -------------------------------------------------------------------------------------------------------------------------
Net Income After Dividends on Preferred and Preference Stock $ 23,395 $ 22,110 $ 21,459
=========================================================================================================================
Pro Forma Net Income After Dividends on Preferred Stock
Assuming Change in Method of Recording
Revenues Was Applied Retroactively $ 23,395 $ 22,110 $ 21,459
</TABLE>
II-250
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF INCOME
Savannah Electric and Power Company
=========================================================================================================================
For the Years Ended December 31, 1992 1991 1990
- - -------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
Operating Revenues:
Revenues $ 196,256 $ 188,216 $ 200,069
Revenues from affiliates 1,505 1,430 5,566
- - -------------------------------------------------------------------------------------------------------------------------
Total operating revenues 197,761 189,646 205,635
- - -------------------------------------------------------------------------------------------------------------------------
Operating Expenses:
Operation --
Fuel 14,162 14,415 42,630
Purchased power from non-affiliates 494 297 611
Purchased power from affiliates 56,492 49,007 34,648
Other 36,884 32,945 30,630
Maintenance 14,232 12,475 12,754
Depreciation and amortization 16,829 16,549 16,118
Taxes other than income taxes 10,231 10,122 9,798
Federal and state income taxes 14,566 16,195 17,611
- - -------------------------------------------------------------------------------------------------------------------------
Total operating expenses 163,890 152,005 164,800
- - -------------------------------------------------------------------------------------------------------------------------
Operating Income 33,871 37,641 40,835
Other Income (Expense):
Allowance for equity funds used during construction 446 170 193
Interest income 276 589 741
Other, net (1,450) (879) (803)
Income taxes applicable to other income 758 722 187
- - -------------------------------------------------------------------------------------------------------------------------
Income Before Interest Charges 33,901 38,243 41,153
- - -------------------------------------------------------------------------------------------------------------------------
Interest Charges:
Interest on long-term debt 10,870 11,486 12,052
Allowance for debt funds used during construction (289) (103) (194)
Interest on notes payable 15 25 116
Amortization of debt discount, premium, and expense, net 427 380 241
Other interest charges 466 525 665
- - -------------------------------------------------------------------------------------------------------------------------
Net interest charges 11,489 12,313 12,880
- - -------------------------------------------------------------------------------------------------------------------------
Income Before Cumulative Effect of a
Change in Method of Recording Revenues 22,412 25,930 28,273
Cumulative effect as of January 1, 1988, of accruing unbilled
revenues--less income taxes of $1,164(000) - - -
- - -------------------------------------------------------------------------------------------------------------------------
Net Income 22,412 25,930 28,273
Dividends on Preferred and Preference Stock 1,900 1,900 2,019
- - -------------------------------------------------------------------------------------------------------------------------
Net Income After Dividends on Preferred and Preference Stock $ 20,512 $ 24,030 $ 26,254
=========================================================================================================================
Pro Forma Net Income After Dividends on Preferred Stock
Assuming Change in Method of Recording
Revenues Was Applied Retroactively $ 20,512 $ 24,030 $ 26,254
</TABLE>
II-251A
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF INCOME
Savannah Electric and Power Company
=========================================================================================================================
For the Years Ended December 31, 1989 1988 1987
- - -------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
Operating Revenues:
Revenues $ 195,774 $ 178,873 $ 174,707
Revenues from affiliates 6,025 3,567 -
- - -------------------------------------------------------------------------------------------------------------------------
Total operating revenues 201,799 182,440 174,707
- - -------------------------------------------------------------------------------------------------------------------------
Operating Expenses:
Operation --
Fuel 44,224 46,578 38,597
Purchased power from non-affiliates 616 3,593 11,453
Purchased power from affiliates 26,361 6,586 1,186
Other 29,371 28,271 25,642
Maintenance 12,281 14,261 13,629
Depreciation and amortization 20,343 19,771 18,152
Taxes other than income taxes 9,152 9,209 9,088
Federal and state income taxes 17,571 14,017 16,969
- - -------------------------------------------------------------------------------------------------------------------------
Total operating expenses 159,919 142,286 134,716
- - -------------------------------------------------------------------------------------------------------------------------
Operating Income 41,880 40,154 39,991
Other Income (Expense):
Allowance for equity funds used during construction - 273 512
Interest income 719 355 925
Other, net (672) (1,423) (464)
Income taxes applicable to other income 192 459 (317)
- - -------------------------------------------------------------------------------------------------------------------------
Income Before Interest Charges 42,119 39,818 40,647
- - -------------------------------------------------------------------------------------------------------------------------
Interest Charges:
Interest on long-term debt 12,287 15,603 17,127
Allowance for debt funds used during construction (112) (330) (459)
Interest on notes payable 402 230 70
Amortization of debt discount, premium, and expense, net 274 196 237
Other interest charges 1,313 336 251
- - -------------------------------------------------------------------------------------------------------------------------
Net interest charges 14,164 16,035 17,226
- - -------------------------------------------------------------------------------------------------------------------------
Income Before Cumulative Effect of a
Change in Method of Recording Revenues 27,955 23,783 23,421
Cumulative effect as of January 1, 1988, of accruing unbilled
revenues--less income taxes of $1,164(000) - 1,920 -
- - -------------------------------------------------------------------------------------------------------------------------
Net Income 27,955 25,703 23,421
Dividends on Preferred and Preference Stock 2,420 1,431 1,335
- - -------------------------------------------------------------------------------------------------------------------------
Net Income After Dividends on Preferred and Preference Stock $ 25,535 $ 24,272 $ 22,086
=========================================================================================================================
Pro Forma Net Income After Dividends on Preferred Stock
Assuming Change in Method of Recording
Revenues Was Applied Retroactively $ 25,535 $ 22,352 $ 21,865
</TABLE>
II-251B
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF INCOME
Savannah Electric and Power Company
=========================================================================================================
For the Years Ended December 31, 1986 1985
- - ---------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C>
Operating Revenues:
Revenues $ 174,847 $ 158,643
Revenues from affiliates - -
- - ---------------------------------------------------------------------------------------------------------
Total operating revenues 174,847 158,643
- - ---------------------------------------------------------------------------------------------------------
Operating Expenses:
Operation --
Fuel 44,393 45,232
Purchased power from non-affiliates 6,069 7,577
Purchased power from affiliates 2,071 1,526
Other 24,114 20,292
Maintenance 12,591 12,029
Depreciation and amortization 16,443 15,798
Taxes other than income taxes 7,863 6,724
Federal and state income taxes 21,405 15,495
- - ---------------------------------------------------------------------------------------------------------
Total operating expenses 134,949 124,673
- - ---------------------------------------------------------------------------------------------------------
Operating Income 39,898 33,970
Other Income (Expense):
Allowance for equity funds used during construction 27 646
Interest income 924 943
Other, net (553) (107)
Income taxes applicable to other income (217) (389)
- - ---------------------------------------------------------------------------------------------------------
Income Before Interest Charges 40,079 35,063
- - ---------------------------------------------------------------------------------------------------------
Interest Charges:
Interest on long-term debt 17,415 18,089
Allowance for debt funds used during construction (73) (725)
Interest on notes payable 315 437
Amortization of debt discount, premium, and expense, net 234 302
Other interest charges 335 213
- - ---------------------------------------------------------------------------------------------------------
Net interest charges 18,226 18,316
- - ---------------------------------------------------------------------------------------------------------
Income Before Cumulative Effect of a
Change in Method of Recording Revenues 21,853 16,747
Cumulative effect as of January 1, 1988, of accruing unbilled
revenues--less income taxes of $1,164(000) - -
- - ---------------------------------------------------------------------------------------------------------
Net Income 21,853 16,747
Dividends on Preferred and Preference Stock 1,401 1,468
- - ---------------------------------------------------------------------------------------------------------
Net Income After Dividends on Preferred and Preference Stock $ 20,452 $ 15,279
=========================================================================================================
Pro Forma Net Income After Dividends on Preferred Stock
Assuming Change in Method of Recording
Revenues Was Applied Retroactively $ 20,606 $ 15,744
</TABLE>
II-251C
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS
Savannah Electric and Power Company
=========================================================================================================================
For the Years Ended December 31, 1995 1994 1993
- - -------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
Operating Activities:
Net income $ 25,719 $ 24,434 $ 23,565
Adjustments to reconcile net income to net
cash provided by operating activities --
Depreciation and amortization 20,535 19,353 17,482
Deferred income taxes, net 4,359 1,625 607
Deferred investment tax credits, net - - -
Allowance for equity funds used during construction (163) (831) (958)
Other, net 35 826 2,853
Changes in certain current assets and liabilities --
Receivables, net (6,241) 18,481 (16,839)
Special deposits - - -
Inventories 2,318 1,144 (3,947)
Payables 2,213 (19,957) 18,742
Other (1,848) (117) 3,282
- - -------------------------------------------------------------------------------------------------------------------------
Net cash provided from operating activities 46,927 44,958 44,787
- - -------------------------------------------------------------------------------------------------------------------------
Investing Activities:
Gross property additions (26,503) (30,078) (72,858)
Sales of property - - -
Other 3,198 (841) 1,676
- - -------------------------------------------------------------------------------------------------------------------------
Net cash used for investing activities (23,305) (30,919) (71,182)
- - -------------------------------------------------------------------------------------------------------------------------
Financing Activities:
Proceeds:
Preferred stock - - 35,000
First mortgage bonds 15,000 - 45,000
Pollution control bonds - - 4,085
Other long-term debt 33,500 8,500 10,000
Common stock - - -
Retirements:
Preferred and preference stock - - (20,000)
First mortgage bonds (29,250) (5,065) -
Pollution control bonds - - (4,085)
Other long-term debt (23,003) (823) (10,356)
Notes payable, net 1,500 (500) (4,500)
Payment of preferred and preference stock dividends (2,324) (2,129) (2,222)
Payment of common and class A stock dividends (17,600) (16,300) (21,000)
Miscellaneous (2,131) (74) (3,400)
- - -------------------------------------------------------------------------------------------------------------------------
Net cash provided from (used for) financing activities (24,308) (16,391) 28,522
- - -------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Cash and Cash Equivalents (686) (2,352) 2,127
Cash and Cash Equivalents at Beginning of Year 1,563 3,915 1,788
- - -------------------------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Year $ 877 $ 1,563 $ 3,915
=========================================================================================================================
( ) Denotes use of cash.
</TABLE>
II-252
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS
Savannah Electric and Power Company
=========================================================================================================================
For the Years Ended December 31, 1992 1991 1990
- - -------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
Operating Activities:
Net income $ 22,412 $ 25,930 $ 28,273
Adjustments to reconcile net income to net
cash provided by operating activities --
Depreciation and amortization 17,757 17,501 16,995
Deferred income taxes, net 5,947 1,601 2,782
Deferred investment tax credits, net - - -
Allowance for equity funds used during construction (446) (170) (193)
Other, net (1,312) (1,876) 511
Changes in certain current assets and liabilities --
Receivables, net (4,107) 5,291 1,541
Special deposits 350 1,348 185
Inventories 4,435 (1,082) 1,246
Payables 351 568 (228)
Other 2,083 3,710 (319)
- - -------------------------------------------------------------------------------------------------------------------------
Net cash provided from operating activities 47,470 52,821 50,793
- - -------------------------------------------------------------------------------------------------------------------------
Investing Activities:
Gross property additions (30,132) (19,478) (20,086)
Sales of property - - -
Other (1,073) 407 (120)
- - -------------------------------------------------------------------------------------------------------------------------
Net cash used for investing activities (31,205) (19,071) (20,206)
- - -------------------------------------------------------------------------------------------------------------------------
Financing Activities:
Proceeds:
Preferred stock - - -
First mortgage bonds 30,000 30,000 -
Pollution control bonds 13,870 - -
Other long-term debt - - -
Common stock - - -
Retirements:
Preferred and preference stock - - (5,374)
First mortgage bonds (38,750) (22,500) (9,135)
Pollution control bonds (14,550) (515) (485)
Other long-term debt (217) (275) (364)
Notes payable, net 7,500 (1,500) 1,500
Payment of preferred and preference stock dividends (1,900) (1,900) (2,113)
Payment of common and class A stock dividends (22,000) (22,000) (22,000)
Miscellaneous (3,985) (477) 47
- - -------------------------------------------------------------------------------------------------------------------------
Net cash provided from (used for) financing activities (30,032) (19,167) (37,924)
- - -------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Cash and Cash Equivalents (13,767) 14,583 (7,337)
Cash and Cash Equivalents at Beginning of Year 15,555 972 8,309
- - -------------------------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Year $ 1,788 $ 15,555 $ 972
=========================================================================================================================
( ) Denotes use of cash.
</TABLE>
II-253A
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS
Savannah Electric and Power Company
=========================================================================================================================
For the Years Ended December 31, 1989 1988 1987
- - -------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
Operating Activities:
Net income $ 27,955 $ 25,703 $ 23,421
Adjustments to reconcile net income to net
cash provided by operating activities --
Depreciation and amortization 21,310 20,592 19,126
Deferred income taxes, net 3,476 3,568 925
Deferred investment tax credits, net - - (5)
Allowance for equity funds used during construction - (273) (512)
Other, net (775) 718 (1,016)
Changes in certain current assets and liabilities --
Receivables, net (6,949) (7,062) 1,360
Special deposits 2,708 (558) (587)
Inventories (1,503) 3,063 (503)
Payables 1,086 (1,151) (78)
Other 1,544 (1,684) (757)
- - -------------------------------------------------------------------------------------------------------------------------
Net cash provided from operating activities 48,852 42,916 41,374
- - -------------------------------------------------------------------------------------------------------------------------
Investing Activities:
Gross property additions (18,831) (23,254) (32,276)
Sales of property - - -
Other 381 (4,042) 1,296
- - -------------------------------------------------------------------------------------------------------------------------
Net cash used for investing activities (18,450) (27,296) (30,980)
- - -------------------------------------------------------------------------------------------------------------------------
Financing Activities:
Proceeds:
Preferred stock - 20,000 -
First mortgage bonds 30,000 - -
Pollution control bonds - - -
Other long-term debt - - -
Common stock - 403 1,693
Retirements:
Preferred and preference stock (6,591) (553) (588)
First mortgage bonds (18,275) (12,231) (10,239)
Pollution control bonds (455) (430) (405)
Other long-term debt (7,656) (4,401) (3,954)
Notes payable, net - - -
Payment of preferred and preference stock dividends (2,318) (1,284) (1,351)
Payment of common and class A stock dividends (20,000) (14,407) (10,383)
Miscellaneous (1,071) (269) -
- - -------------------------------------------------------------------------------------------------------------------------
Net cash provided from (used for) financing activities (26,366) (13,172) (25,227)
- - -------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Cash and Cash Equivalents 4,036 2,448 (14,833)
Cash and Cash Equivalents at Beginning of Year 4,273 1,825 16,658
- - -------------------------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Year $ 8,309 $ 4,273 $ 1,825
=========================================================================================================================
( ) Denotes use of cash.
</TABLE>
II-253B
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS
Savannah Electric and Power Company
=========================================================================================================
For the Years Ended December 31, 1986 1985
- - ---------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C>
Operating Activities:
Net income $ 21,853 $ 16,747
Adjustments to reconcile net income to net
cash provided by operating activities --
Depreciation and amortization 16,855 16,484
Deferred income taxes, net 4,443 3,034
Deferred investment tax credits, net 489 3,084
Allowance for equity funds used during construction (27) (646)
Other, net 474 (1,730)
Changes in certain current assets and liabilities --
Receivables, net 1,456 (1,122)
Special deposits (53) (916)
Inventories 663 5,563
Payables (1,750) 2,135
Other 1,916 2
- - ---------------------------------------------------------------------------------------------------------
Net cash provided from operating activities 46,319 42,635
- - ---------------------------------------------------------------------------------------------------------
Investing Activities:
Gross property additions (26,800) (30,700)
Sales of property - 1,145
Other (824) 2,682
- - ---------------------------------------------------------------------------------------------------------
Net cash used for investing activities (27,624) (26,873)
- - ---------------------------------------------------------------------------------------------------------
Financing Activities:
Proceeds:
Preferred stock - -
First mortgage bonds 25,000 20,000
Pollution control bonds - -
Other long-term debt - -
Common stock 1,691 1,777
Retirements:
Preferred and preference stock (610) (588)
First mortgage bonds (10,160) (5,592)
Pollution control bonds (380) (360)
Other long-term debt (3,075) (17,721)
Notes payable, net (4,500) (4,500)
Payment of preferred and preference stock dividends (1,418) (1,485)
Payment of common and class A stock dividends (9,114) (8,347)
Miscellaneous (436) (383)
- - ---------------------------------------------------------------------------------------------------------
Net cash provided from (used for) financing activities (3,002) (17,199)
- - ---------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Cash and Cash Equivalents 15,693 (1,437)
Cash and Cash Equivalents at Beginning of Year 965 2,402
- - ---------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Year $ 16,658 $ 965
=========================================================================================================
( ) Denotes use of cash.
</TABLE>
II-253C
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
Savannah Electric and Power Company
=========================================================================================================================
At December 31, 1995 1994 1993
- - -------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
ASSETS
Utility Plant:
Production-fossil $ 317,026 $ 312,215 $ 257,708
Transmission 102,129 100,956 99,791
Distribution 264,115 251,323 237,012
General 31,876 28,938 28,010
Construction work in progress 6,707 5,930 49,797
- - -------------------------------------------------------------------------------------------------------------------------
Total utility plant 721,853 699,362 672,318
Accumulated provision for depreciation 287,004 267,590 251,565
- - -------------------------------------------------------------------------------------------------------------------------
Total 434,849 431,772 420,753
Less property-related accumulated deferred income taxes - - -
- - -------------------------------------------------------------------------------------------------------------------------
Total 434,849 431,772 420,753
- - -------------------------------------------------------------------------------------------------------------------------
Other Property and Investments 1,788 1,790 1,793
- - -------------------------------------------------------------------------------------------------------------------------
Current Assets:
Cash and cash equivalents 877 1,563 3,915
Receivables, net 21,346 12,328 27,714
Accrued unbilled revenues 5,110 4,780 3,789
Fuel cost under recovery - 3,113 7,112
Fossil fuel stock, at average cost 6,076 7,557 8,419
Materials and supplies, at average cost 8,239 9,076 9,358
Prepayments 6,467 7,446 4,849
- - -------------------------------------------------------------------------------------------------------------------------
Total 48,115 45,863 65,156
- - -------------------------------------------------------------------------------------------------------------------------
Deferred Charges:
Deferred charges related to income taxes 21,557 23,521 24,890
Miscellaneous 18,353 15,359 14,595
- - -------------------------------------------------------------------------------------------------------------------------
Total 39,910 38,880 39,485
- - -------------------------------------------------------------------------------------------------------------------------
Total Assets $ 524,662 $ 518,305 $ 527,187
=========================================================================================================================
</TABLE>
II-254
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
Savannah Electric and Power Company
=========================================================================================================================
At December 31, 1992 1991 1990
- - -------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
ASSETS
Utility Plant:
Production-fossil $ 258,539 $ 247,017 $ 246,278
Transmission 93,182 90,198 73,358
Distribution 222,024 212,576 217,913
General 25,851 24,283 22,990
Construction work in progress 5,966 4,211 1,354
- - -------------------------------------------------------------------------------------------------------------------------
Total utility plant 605,562 578,285 561,893
Accumulated provision for depreciation 240,094 225,605 211,725
- - -------------------------------------------------------------------------------------------------------------------------
Total 365,468 352,680 350,168
Less property-related accumulated deferred income taxes 65,725 62,737 58,106
- - -------------------------------------------------------------------------------------------------------------------------
Total 299,743 289,943 292,062
- - -------------------------------------------------------------------------------------------------------------------------
Other Property and Investments 1,795 39 39
- - -------------------------------------------------------------------------------------------------------------------------
Current Assets:
Cash and cash equivalents 1,788 15,555 972
Receivables, net 14,480 14,549 14,450
Accrued unbilled revenues 3,401 3,252 3,831
Fuel cost under recovery 3,895 - 5,662
Fossil fuel stock, at average cost 4,895 9,196 8,071
Materials and supplies, at average cost 8,935 9,069 9,112
Prepayments 1,599 4,544 1,492
- - -------------------------------------------------------------------------------------------------------------------------
Total 38,993 56,165 43,590
- - -------------------------------------------------------------------------------------------------------------------------
Deferred Charges:
Deferred charges related to income taxes - - -
Miscellaneous 11,644 6,358 4,359
- - -------------------------------------------------------------------------------------------------------------------------
Total 11,644 6,358 4,359
- - -------------------------------------------------------------------------------------------------------------------------
Total Assets $ 352,175 $ 352,505 340,050
=========================================================================================================================
</TABLE>
II-255A
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
Savannah Electric and Power Company
=========================================================================================================================
At December 31, 1989 1988 1987
- - -------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
ASSETS
Utility Plant:
Production-fossil $ 242,988 $ 241,833 $ 236,587
Transmission 72,299 71,601 69,822
Distribution 204,611 192,335 177,163
General 22,482 21,686 17,513
Construction work in progress 2,880 1,684 7,214
- - -------------------------------------------------------------------------------------------------------------------------
Total utility plant 545,260 529,139 508,299
Accumulated provision for depreciation 198,228 178,888 161,531
- - -------------------------------------------------------------------------------------------------------------------------
Total 347,032 350,251 346,768
Less property-related accumulated deferred income taxes 54,418 51,487 49,255
- - -------------------------------------------------------------------------------------------------------------------------
Total 292,614 298,764 297,513
- - -------------------------------------------------------------------------------------------------------------------------
Other Property and Investments 49 49 49
- - -------------------------------------------------------------------------------------------------------------------------
Current Assets:
Cash and cash equivalents 8,309 4,273 1,825
Receivables, net 14,300 15,714 14,419
Accrued unbilled revenues 4,501 3,889 -
Fuel cost under recovery 6,881 1,838 -
Fossil fuel stock, at average cost 9,706 8,455 12,359
Materials and supplies, at average cost 8,723 8,471 7,630
Prepayments 585 1,240 2,786
- - -------------------------------------------------------------------------------------------------------------------------
Total 53,005 43,880 39,019
- - -------------------------------------------------------------------------------------------------------------------------
Deferred Charges:
Deferred charges related to income taxes - - -
Miscellaneous 4,219 4,358 4,127
- - -------------------------------------------------------------------------------------------------------------------------
Total 4,219 4,358 4,127
- - -------------------------------------------------------------------------------------------------------------------------
Total Assets $ 349,887 $ 347,051 $ 340,708
=========================================================================================================================
</TABLE>
II-255B
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
Savannah Electric and Power Company
=========================================================================================================
At December 31, 1986 1985
- - ---------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C>
ASSETS
Utility Plant:
Production-fossil $ 232,316 $ 229,765
Transmission 65,215 61,843
Distribution 160,346 147,563
General 14,838 13,153
Construction work in progress 5,270 1,915
- - ---------------------------------------------------------------------------------------------------------
Total utility plant 477,985 454,239
Accumulated provision for depreciation 144,232 130,279
- - ---------------------------------------------------------------------------------------------------------
Total 333,753 323,960
Less property-related accumulated deferred income taxes 46,496 41,026
- - ---------------------------------------------------------------------------------------------------------
Total 287,257 282,934
- - ---------------------------------------------------------------------------------------------------------
Other Property and Investments 39 39
- - ---------------------------------------------------------------------------------------------------------
Current Assets:
Cash and cash equivalents 16,658 965
Receivables, net 13,806 14,472
Accrued unbilled revenues - -
Fuel cost under recovery 787 1,524
Fossil fuel stock, at average cost 12,642 13,615
Materials and supplies, at average cost 6,844 6,534
Prepayments 978 383
- - ---------------------------------------------------------------------------------------------------------
Total 51,715 37,493
- - ---------------------------------------------------------------------------------------------------------
Deferred Charges:
Deferred charges related to income taxes - -
Miscellaneous 2,815 3,220
- - ---------------------------------------------------------------------------------------------------------
Total 2,815 3,220
- - ---------------------------------------------------------------------------------------------------------
Total Assets $ 341,826 $ 323,686
=========================================================================================================
</TABLE>
II-255C
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
Savannah Electric and Power Company
=========================================================================================================================
At December 31, 1995 1994 1993
- - -------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock $ 54,223 $ 54,223 $ 54,223
Paid-in capital 8,688 8,688 8,688
Additional minimum liability
for under-funded pension obligations (132) (546) (2,121)
Retained Earnings 105,033 99,216 93,479
- - -------------------------------------------------------------------------------------------------------------------------
Total common equity 167,812 161,581 154,269
Preferred stock 35,000 35,000 35,000
Preferred and preference stock subject to mandatory redemption - - -
Long-term debt 153,679 155,922 151,338
- - -------------------------------------------------------------------------------------------------------------------------
Total (excluding amount due within one year) 356,491 352,503 340,607
- - -------------------------------------------------------------------------------------------------------------------------
Current Liabilities:
Notes payable to banks 4,000 2,500 3,000
Preferred and preference stock due within one year - - -
Long-term debt due within one year 1,407 2,579 4,499
Accounts payable 11,362 8,991 30,442
Customer deposits 5,054 4,698 4,714
Fuel cost over recovery 865 - -
Taxes accrued 1,584 1,133 1,529
Interest accrued 6,331 6,830 6,730
Vacation pay accrued 1,916 1,823 1,638
Miscellaneous 5,870 8,282 8,703
- - -------------------------------------------------------------------------------------------------------------------------
Total 38,389 36,836 61,255
- - -------------------------------------------------------------------------------------------------------------------------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 74,152 70,786 66,947
Accumulated deferred investment tax credits 13,934 14,637 15,301
Deferred credits related to income taxes 24,419 25,487 26,173
Deferred under-funded accrued benefit obligation 2,123 3,022 5,855
Miscellaneous 15,154 15,034 11,049
- - -------------------------------------------------------------------------------------------------------------------------
Total 129,782 128,966 125,325
- - -------------------------------------------------------------------------------------------------------------------------
Total Capitalization and Liabilities $ 524,662 $ 518,305 $ 527,187
=========================================================================================================================
</TABLE>
II-256
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
Savannah Electric and Power Company
=========================================================================================================================
At December 31, 1992 1991 1990
- - -------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock $ 54,223 $ 54,223 $ 54,223
Paid-in capital 8,688 8,665 8,665
Additional minimum liability
for under-funded pension obligations - - -
Retained Earnings 95,465 96,953 94,923
- - -------------------------------------------------------------------------------------------------------------------------
Total common equity 158,376 159,841 157,811
Preferred stock 20,000 20,000 20,000
Preferred and preference stock subject to mandatory redemption - - -
Long-term debt 110,767 119,280 112,377
- - -------------------------------------------------------------------------------------------------------------------------
Total (excluding amount due within one year) 289,143 299,121 290,188
- - -------------------------------------------------------------------------------------------------------------------------
Current Liabilities:
Notes payable to banks 7,500 - 1,500
Preferred and preference stock due within one year - - -
Long-term debt due within one year 1,319 2,442 2,358
Accounts payable 11,179 10,176 8,786
Customer deposits 4,541 4,528 4,472
Fuel cost over recovery - 1,603 -
Taxes accrued 3,016 724 1,387
Interest accrued 5,733 4,657 3,415
Vacation pay accrued 1,790 1,672 1,604
Miscellaneous 5,025 4,823 3,398
- - -------------------------------------------------------------------------------------------------------------------------
Total 40,103 30,625 26,920
- - -------------------------------------------------------------------------------------------------------------------------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes - - -
Accumulated deferred investment tax credits 15,964 16,628 17,292
Deferred credits related to income taxes - - -
Deferred under-funded accrued benefit obligation - - -
Miscellaneous 6,965 6,131 5,650
- - -------------------------------------------------------------------------------------------------------------------------
Total 22,929 22,759 22,942
- - -------------------------------------------------------------------------------------------------------------------------
Total Capitalization and Liabilities $ 352,175 $ 352,505 $ 340,050
=========================================================================================================================
</TABLE>
II-257A
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
Savannah Electric and Power Company
=========================================================================================================================
At December 31, 1989 1988 1987
- - -------------------------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock $ 54,223 $ 54,223 $ 54,131
Paid-in capital 8,665 8,665 8,353
Additional minimum liability
for under-funded pension obligations - - -
Retained Earnings 90,849 85,995 73,723
- - -------------------------------------------------------------------------------------------------------------------------
Total common equity 153,737 148,883 136,207
Preferred stock 22,300 22,300 2,300
Preferred and preference stock subject to mandatory redemption 2,884 3,075 9,665
Long-term debt 117,522 98,285 129,329
- - -------------------------------------------------------------------------------------------------------------------------
Total (excluding amount due within one year) 296,443 272,543 277,501
- - -------------------------------------------------------------------------------------------------------------------------
Current Liabilities:
Notes payable to banks - - -
Preferred and preference stock due within one year 190 6,590 553
Long-term debt due within one year 7,091 23,217 8,956
Accounts payable 9,078 7,950 9,427
Customer deposits 4,296 3,983 3,729
Fuel cost over recovery - - 599
Taxes accrued 1,749 1,899 3,713
Interest accrued 4,287 4,154 4,599
Vacation pay accrued 1,477 1,412 1,306
Miscellaneous 2,880 1,705 6,257
- - -------------------------------------------------------------------------------------------------------------------------
Total 31,048 50,910 39,139
- - -------------------------------------------------------------------------------------------------------------------------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes - - -
Accumulated deferred investment tax credits 17,971 19,106 20,264
Deferred credits related to income taxes - - -
Deferred under-funded accrued benefit obligation - - -
Miscellaneous 4,425 4,492 3,804
- - -------------------------------------------------------------------------------------------------------------------------
Total 22,396 23,598 24,068
- - -------------------------------------------------------------------------------------------------------------------------
Total Capitalization and Liabilities $ 349,887 $ 347,051 $ 340,708
=========================================================================================================================
</TABLE>
II-257B
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
Savannah Electric and Power Company
=========================================================================================================
At December 31, 1986 1985
- - ---------------------------------------------------------------------------------------------------------
(Thousands of Dollars)
<S> <C> <C>
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock $ 53,174 $ 52,332
Paid-in capital 7,623 6,774
Additional minimum liability
for under-funded pension obligations - -
Retained Earnings 62,336 51,279
- - ---------------------------------------------------------------------------------------------------------
Total common equity 123,133 110,385
Preferred stock 2,300 2,300
Preferred and preference stock subject to mandatory redemption 10,256 10,848
Long-term debt 137,821 128,850
- - ---------------------------------------------------------------------------------------------------------
Total (excluding amount due within one year) 273,510 252,383
- - ---------------------------------------------------------------------------------------------------------
Current Liabilities:
Notes payable to banks - 4,500
Preferred and preference stock due within one year 550 568
Long-term debt due within one year 14,836 12,636
Accounts payable 10,329 12,584
Customer deposits 3,403 3,256
Fuel cost over recovery - -
Taxes accrued 4,834 3,595
Interest accrued 4,906 4,984
Vacation pay accrued 1,255 1,150
Miscellaneous 3,650 3,356
- - ---------------------------------------------------------------------------------------------------------
Total 43,763 46,629
- - ---------------------------------------------------------------------------------------------------------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes - -
Accumulated deferred investment tax credits 21,663 22,265
Deferred credits related to income taxes - -
Deferred under-funded accrued benefit obligation - -
Miscellaneous 2,890 2,409
- - ---------------------------------------------------------------------------------------------------------
Total 24,553 24,674
- - ---------------------------------------------------------------------------------------------------------
Total Capitalization and Liabilities $ 341,826 $ 323,686
=========================================================================================================
</TABLE>
II-257C
<PAGE>
SAVANNAH ELECTRIC AND POWER COMPANY
OUTSTANDING SECURITIES AT DECEMBER 31, 1995
First Mortgage Bonds
Amount Interest Amount
Series Issued Rate Outstanding Maturity
- - --------------------------------------------------------------------------------
(Thousands) (Thousands)
1993 $ 20,000 6-3/8% $ 20,000 7/1/03
1991 30,000 9-3/8% 29,400 7/1/21
1992 30,000 8.30% 30,000 7/1/22
1993 25,000 7.40% 25,000 7/1/23
1995 15,000 7-7/8% 15,000 5/1/25
============ ===========
$ 120,000 $ 119,400
============ ===========
Pollution Control Bonds
Amount Interest Amount
Series Issued Rate Outstanding Maturity
- - --------------------------------------------------------------------------------
(Thousands) (Thousands)
1993 $ 4,085 Variable $ 4,085 1/1/16
1992 13,870 6-3/4% 13,870 2/1/22
============ ===========
$ 17,955 $ 17,955
============ ===========
Preferred Stock
Shares Dividend Amount
Series Outstanding Rate Outstanding
- - ----------------------------------------------------------------------
(Thousands)
1993 1,400,000 6.64% $ 35,000
SECURITIES RETIRED DURING 1995
First Mortgage Bonds
Principal Interest
Series Amount Rate
- - ----------------------------------------------------------------------
(Thousands)
1989 $ 28,950 9-1/4%
1991 300 9-3/8%
============
$ 29,250
============
II-258
<PAGE>
PART III
Items 10, 11, 12 and 13 for SOUTHERN are incorporated by reference to ELECTION
OF DIRECTORS in SOUTHERN's definitive Proxy Statement relating to the 1996
annual meeting of stockholders. The ages of directors and executive officers in
Item 10 set forth below are as of December 31, 1995.
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANTS
ALABAMA
Identification of directors of ALABAMA.
Elmer B. Harris (1)
President and Chief Executive Officer
Age 56
Served as Director since 3-1-89
Bill M. Guthrie
Executive Vice President
Age 62
Served as Director since 12-16-88
Whit Armstrong (2)
Age 48
Served as Director since 9-24-82
Philip E. Austin (2)
Age 53
Served as Director since 1-25-91
Margaret A. Carpenter (2)
Age 71
Served as Director since 2-26-93
A. W. Dahlberg (2)
Age 55
Served as Director since 4-22-94
Peter V. Gregerson, Sr. (2)
Age 67
Served as Director since 10-22-93
Carl E. Jones, Jr. (2)
Age 55
Served as Director since 4-22-88
Wallace D. Malone, Jr. (2)
Age 59
Served as Director since 6-22-90
William V. Muse (2)
Age 56
Served as Director since 2-26-93
John T. Porter (2)
Age 64
Served as Director since 10-22-93
Gerald H. Powell (2)
Age 69
Served as Director since 2-28-86
Robert D. Powers (2)
Age 45
Served as Director since 1-24-92
John W. Rouse (2)
Age 58
Served as Director since 4-22-88
William J. Rushton, III (2)
Age 66
Served as Director since 9-18-70
James H. Sanford (2)
Age 51
Served as Director since 8-1-83
John C. Webb, IV (2)
Age 53
Served as Director since 4-22-77
John W. Woods (2)
Age 64
Served as Director since 4-20-73
(1) Previously served as Director of ALABAMA from 1980 to 1985.
(2) No position other than Director.
Each of the above is currently a director of ALABAMA, serving a term running
from the last annual meeting of ALABAMA's stockholder (April 28, 1995) for one
year until the next annual meeting or until a successor is elected and
qualified.
III-1
<PAGE>
There are no arrangements or understandings between any of the individuals
listed above and any other person pursuant to which he was or is to be selected
as a director or nominee, other than any arrangements or understandings with
directors or officers of ALABAMA acting solely in their capacities as such.
Identification of executive officers of ALABAMA.
Elmer B. Harris (1)
President, Chief Executive Officer and Director
Age 56
Served as Executive Officer since 3-1-89
Banks H. Farris
Executive Vice President
Age 60
Served as Executive Officer since 12-3-91
William B. Hutchins, III
Executive Vice President and Chief Financial Officer
Age 52
Served as Executive Officer since 12-3-91
Charles D. McCrary
Executive Vice President
Age 44
Served as Executive Officer since 1-1-91
(1) Previously served as executive officer of ALABAMA from 1979 to 1985.
Each of the above is currently an executive officer of ALABAMA, serving a
term running from the last annual meeting of the directors (April 28, 1995) for
one year until the next annual meeting or until his successor is elected and
qualified.
There are no arrangements or understandings between any of the individuals
listed above and any other person pursuant to which he was or is to be selected
as an officer, other than any arrangements or understandings with officers of
ALABAMA acting solely in their capacities as such.
Identification of certain significant employees.
None.
Family relationships.
None.
Business experience.
Elmer B. Harris - Elected in 1989; Chief Executive Officer. Director of SOUTHERN
and AmSouth Bancorporation.
Bill M. Guthrie - Elected in 1988; also served since 1991 as Chief Production
Officer of SOUTHERN system and from 1991 to 1994 as Executive Vice President and
Chief Production Officer of SCS. Elected Senior Executive Vice President and
Chief Production Officer of SCS effective 1994. Also serves as Vice President of
SOUTHERN, GULF, MISSISSIPPI and SAVANNAH and Executive Vice President of
GEORGIA. Responsible primarily for providing overall management of materials
management, fuel services, operating and planning services, fossil, hydro and
bulk power operations of the Southern electric system.
Whit Armstrong - President, Chairman and Chief Executive Officer of The Citizens
Bank, Enterprise, Alabama. Also, President and Chairman of the Board of
Enterprise Capital Corporation, Inc.
Philip E. Austin - Chancellor, The University of Alabama System. Previously
President and Chancellor of Colorado State University.
Margaret A. Carpenter - President, Compos-it, Inc. (typographics), Montgomery,
Alabama.
A. W. Dahlberg - Chairman, President and Chief Executive Officer of SOUTHERN
effective March 1, 1995. He previously served as President of SOUTHERN from 1994
to 1995 and President and Chief Executive Officer of GEORGIA from 1988 through
1993. Director of SOUTHERN, GEORGIA, Protective Life Corporation and Equifax,
Inc. and a nominee for election as a director of SunTrust Banks, Inc.
Peter V. Gregerson, Sr. - Chairman Emeritus of Gregerson's Foods, Inc. (retail
groceries), Gadsden, Alabama.
Carl E. Jones, Jr. - Chairman and Chief Executive Officer of First Alabama Bank,
Mobile, Alabama.
Wallace D. Malone, Jr. - Chairman and Chief Executive Officer of SouthTrust
Corporation, bank holding company, Birmingham, Alabama.
III-2
<PAGE>
William V. Muse - President of Auburn University. He previously served as
President of the University of Akron from 1984 to 1992. Director of Alabama
National Bancorporation, Shoal Creek, Alabama.
John T. Porter - Pastor of Sixth Avenue Baptist Church, Birmingham, Alabama.
Director of Citizen Federal Bank.
Gerald H. Powell - President, Dixie Clay Company of Alabama, Inc. (refractory
clay producer), Jacksonville, Alabama.
Robert D. Powers - President, The Eufaula Agency, Inc. (real estate and
insurance), Eufaula, Alabama.
John W. Rouse - President and Chief Executive Officer of Southern Research
Institute (non-profit research institute), Birmingham, Alabama. Director of
Protective Life Corporation.
William J. Rushton, III - Chairman Emeritus of the Board, Protective Life
Corporation (insurance holding company), Birmingham, Alabama. Director of
SOUTHERN.
James H. Sanford - Chairman, HOME Place Farms Inc. (diversified farmers and
ginners), Prattville, Alabama.
John C. Webb, IV - President, Webb Lumber Company, Inc. (wholesale lumber),
Demopolis, Alabama.
John W. Woods - Effective January 1996, Chairman, AmSouth Bancorporation
(multi-bank holding company), Birmingham, Alabama. He previously served as
Chairman and Chief Executive Officer of AmSouth Bancorporation.
Director of Protective Life Corporation.
Banks H. Farris - Elected in 1991; responsible primarily for providing the
overall management of the Human Resources, Information Resources, Power Delivery
and Marketing Departments and the six geographic divisions. He previously served
as Senior Vice President from 1991 to 1994 and Vice President - Human Resources
from 1989 to 1991.
William B. Hutchins, III - Elected in 1991; Chief Financial Officer, responsible
primarily for providing the overall management of accounting and financial
planning activities. He previously served as Senior Vice President and Chief
Financial Officer from 1991 to 1994 and Vice President and Treasurer from 1983
to 1991.
Charles D. McCrary - Elected in 1991; responsible for the External Relations
Department, Operating Services and Corporate Services. He previously served as
Senior Vice President from 1991 to 1994 and Vice President of Administrative
Services - Nuclear of SCS from 1988 to 1991.
Involvement in certain legal proceedings.
None.
III-3
<PAGE>
GEORGIA
Identification of directors of GEORGIA.
H. Allen Franklin
President and Chief Executive Officer
Age 51
Served as Director since 1-1-94
Warren Y. Jobe
Executive Vice President, Treasurer and Chief Financial Officer
Age 55
Served as Director since 8-1-82
Bennett A. Brown (1)
Age 66
Served as Director since 5-15-80
A. W. Dahlberg (1)
Age 55
Served as Director since 6-1-88
William A. Fickling, Jr. (1)
Age 63
Served as Director since 4-18-73
L. G. Hardman III (1)
Age 56
Served as Director since 6-25-79
James R. Lientz, Jr. (1)
Age 52
Served as Director since 7-21-93
William A. Parker, Jr. (1)
Age 68
Served as Director since 5-19-65
G. Joseph Prendergast (1)
Age 50
Served as Director since 1-20-93
Herman J. Russell (1)
Age 65
Served as Director since 5-18-88
Gloria M. Shatto (1)
Age 64
Served as Director since 2-20-80
William Jerry Vereen (1)
Age 55
Served as Director since 5-18-88
Carl Ware (1) (2)
Age 52
Served as Director since 2-15-95
Thomas R. Williams (1)
Age 67
Served as Director since 3-17-82
(1) No position other than Director.
(2) Previously served as Director of GEORGIA
from 1980 to 1991.
Each of the above is currently a director of GEORGIA, serving a term running
from the last annual meeting of GEORGIA's stockholder (May 17, 1995) for one
year until the next annual meeting or until a successor is elected and
qualified.
There are no arrangements or understandings between any of the individuals
listed above and any other person pursuant to which he/she was or is to be
selected as a director or nominee, other than any arrangements or understandings
with directors or officers of GEORGIA acting solely in their capacities as such.
Identification of executive officers of GEORGIA.
H. Allen Franklin
President, Chief Executive Officer and Director
Age 51
Served as Executive Officer since 1-1-94
Warren Y. Jobe
Executive Vice President, Treasurer, Chief Financial Officer and Director
Age 55
Served as Executive Officer since 5-19-82
William C. Archer, III
Executive Vice President - External Affairs
Age 47
Served as Executive Officer since 4-6-95
III-4
<PAGE>
W. G. Hairston, III
Executive Vice President - Nuclear
Age 51
Served as Executive Officer since 6-1-93
Gene R. Hodges
Executive Vice President - Customer Operations
Age 57
Served as Executive Officer since 11-19-86
William P. Bowers
Senior Vice President - Marketing
Age 39
Served as Executive Officer since 9-22-95
Wayne T. Dahlke
Senior Vice President - Power Delivery
Age 54
Served as Executive Officer since 4-19-89
James K. Davis
Senior Vice President - Corporate Relations
Age 55
Served as Executive Officer since 10-1-93
Robert H. Haubein
Senior Vice President - Fossil/Hydro Power
Age 55
Served as Executive Officer since 2-19-92
Fred D. Williams
Senior Vice President - Wholesale Power Marketing
Age 51
Served as Executive Officer since 11-18-92
Each of the above is currently an executive officer of GEORGIA, serving a
term running from the last annual meeting of the directors (May 17, 1995) for
one year until the next annual meeting or until his successor is elected and
qualified, except for Mr. Bowers whose election was effective on the date
indicated.
There are no arrangements or understandings between any of the individuals
listed above and any other person pursuant to which he was or is to be selected
as an officer, other than any arrangements or understandings with officers of
GEORGIA acting solely in their capacities as such.
Identification of certain significant employees.
None.
Family relationships.
None.
Business experience.
H. Allen Franklin - President and Chief Executive Officer since 1994. He
previously served as President and Chief Executive Officer of SCS from 1988
through 1993. Director of SOUTHERN and SouthTrust Corporation.
Warren Y. Jobe - Executive Vice President and Chief Financial Officer since 1982
and Treasurer since 1992. Responsible for financial and accounting operations
and planning, internal auditing, procurement, corporate services, corporate
secretary and treasury operations.
Bennett A. Brown - Retired as Chairman of the Board of NationsBank on December
31, 1992. Previously Chairman of the Board and Chief Executive Officer of
C&S/Sovran Corporation. Director of Cousins Properties.
A. W. Dahlberg - Chairman, President and Chief Executive Officer of SOUTHERN
effective March 1, 1995. He previously served as President of SOUTHERN from 1994
to 1995 and President and Chief Executive Officer of GEORGIA from 1988 through
1993. Director of SOUTHERN, ALABAMA, Protective Life Corporation and Equifax,
Inc. and a nominee for election as a director of SunTrust Banks, Inc.
William A. Fickling, Jr. - Chairman of the Board, Chief Executive Officer and
President of Beech Street Corporation (provider of managed care services).
L. G. Hardman III - Chairman of the Board of The First National Bank of
Commerce, Georgia and Chairman of the Board and Chief Executive Officer of First
Commerce Bancorp, Inc. Chairman of the Board, President and Treasurer of Harmony
Grove Mills, Inc. (real estate investments). Director of SOUTHERN.
James R. Lientz, Jr. - President of NationsBank of Georgia since 1993. He
previously served as President and Chief Executive Officer of former Citizens &
Southern Bank of South Carolina (now NationsBank) from 1990 to 1993.
III-5
<PAGE>
William A. Parker, Jr. - Chairman of the Board, Seminole Investment Co., L.L.C.
(private investments), Atlanta, Georgia. Director of SOUTHERN, Genuine Parts
Company, Life Insurance Company of Georgia, Atlantic Realty Company, ING North
America Insurance Company, Post Properties, Inc. and Haverty Furniture
Companies, Inc.
G. Joseph Prendergast - Chairman Wachovia Bank of Georgia, N.A. since 1994.
Chairman, Wachovia Bank of South Carolina, and Director, Wachovia Bank of North
Carolina. He previously served as President and Chief Executive Officer,
Wachovia Corporation of Georgia and Wachovia Bank of Georgia, N.A. from 1993 to
1994 and from 1988 to 1993 as Executive Vice President of Wachovia Corporation
and President of Wachovia Corporate Services, Inc.
Herman J. Russell - Chairman of the Board and Chief Executive Officer, H. J.
Russell & Company (construction), Atlanta, Georgia. Chairman of the Board,
Citizens Trust Bank, and Citizens Bancshares Corporation Atlanta, Georgia.
Director of Wachovia Corporation and National Service Industries.
Gloria M. Shatto - President, Berry College, Mount Berry, Georgia. Director of
SOUTHERN, Becton Dickinson & Company, Kmart Corporation and Texas Instruments,
Inc.
William Jerry Vereen - President, Treasurer and Chief Executive Officer of
Riverside Manufacturing Company (manufacture and sale of uniforms), Moultrie,
Georgia. Director of Gerber Scientific, Inc., Textile Clothing Technology Group
and Blue Cross/Blue Shield of Georgia.
Carl Ware - President, Africa Group, Coca-Cola International; Senior Vice
President, The Coca-Cola Co.
Thomas R. Williams - President of The Wales Group, Inc. (investments), Atlanta,
Georgia. Director of ConAgra, Inc., BellSouth Corporation, National Life
Insurance Company of Vermont, AppleSouth, Inc., American Software, Inc. and The
Fidelity Group of Funds.
William C. Archer, III - Executive Vice President - External Affairs since
September 1995. Senior Vice President - External Affairs from April 1995 to
September 1995. Vice President - Human Resources for SCS from 1992 to 1995. Vice
President - Northern Region from March 1992 to August 1992 and Vice President -
Metro Region from 1990 to March 1992.
W. G. Hairston, III - Executive Vice President - Nuclear since 1993. Also, he
has served as President and Chief Operating Officer of Southern Nuclear since
May 1993 and Chief Executive Officer since December 1993. Executive Vice
President of Southern Nuclear from 1992 to 1993 and Senior Vice President of
Southern Nuclear from 1990 to 1992.
Gene R. Hodges - Executive Vice President - Customer Operations since 1992.
Senior Vice President - Region/Land Operations from 1990 to 1992.
William P. Bowers - Senior Vice President - Marketing since September 1995. Vice
President - Retail Sales and Service from 1992 to 1995 and Vice President -
Marketing from 1990 to 1992.
Wayne T. Dahlke - Senior Vice President - Power Delivery since 1992. Senior Vice
President - Marketing from 1989 to 1992.
James K. Davis - Senior Vice President - Corporate Relations since 1993. Vice
President of Corporate Relations from 1988 to 1993.
Robert H. Haubein - Senior Vice President - Fossil/ Hydro Power since 1994.
Senior Vice President Administrative Services from 1992 to 1994 and Vice
President - Northern Region from 1990 to 1992.
Fred D. Williams - Senior Vice President - Wholesale Power Marketing since
August 1995. Senior Vice President Bulk Power Markets from 1992 to August 1995.
Vice President - Bulk Power Markets from 1984 to 1992. In addition, he was
elected Senior Vice President - Wholesale Power Marketing of SCS in August 1995
and Senior Vice President of ALABAMA in February 1996.
Involvement in certain legal proceedings.
None.
III-6
<PAGE>
GULF
Identification of directors of GULF.
Travis J. Bowden
President and Chief Executive Officer
Age 57
Served as Director since 2-1-94
Reed Bell, Sr., M.D. (1)
Age 69
Served as Director since 1-17-86
Paul J. DeNicola (1)
Age 47
Served as Director since 4-19-91
Fred C. Donovan (1)
Age 55
Served as Director since 1-18-91
W. D. Hull, Jr. (1)
Age 63
Served as Director since 10-14-83
C. W. Ruckel (1)
Age 68
Served as Director since 4-20-62
J. K. Tannehill (1)
Age 62
Served as Director since 7-19-85
(1) No position other than Director.
Each of the above is currently a director of GULF, serving a term running
from the last annual meeting of GULF's stockholder (June 27, 1995) for one year
until the next annual meeting or until a successor is elected and qualified.
There are no arrangements or understandings between any of the individuals
listed above and any other person pursuant to which he was or is to be selected
as a director or nominee, other than any arrangements or understandings with
directors or officers of GULF acting solely in their capacities as such.
Identification of executive officers of GULF.
Travis J. Bowden
President, Chief Executive Officer and Director
Age 57
Served as Executive Officer since 2-1-94
F. M. Fisher, Jr.
Vice President - Employee and External Relations
Age 47
Served as Executive Officer since 5-19-89
John E. Hodges, Jr.
Vice President - Customer Operations
Age 52
Served as Executive Officer since 5-19-89
G. Edison Holland, Jr.
Vice President - Power Generation/Transmission and Corporate Counsel
Age 43
Served as Executive Officer since 4-25-92
A. E. Scarbrough
Vice President - Finance
Age 59
Served as Executive Officer since 9-21-77
Each of the above is currently an executive officer of GULF, serving a term
running from the last annual meeting of the directors (July 21, 1995) for one
year until the next annual meeting or until his successor is elected and
qualified.
There are no arrangements or understandings between any of the individuals
listed above and any other person pursuant to which he was or is to be selected
as an officer, other than any arrangements or understandings with officers of
GULF acting solely in their capacities as such.
Identification of certain significant employees.
None.
Family relationships.
None.
III-7
<PAGE>
Business experience.
Travis J. Bowden - Elected President effective February 1994 and, effective May
1994, Chief Executive Officer. He previously served as Executive Vice President
of ALABAMA from 1985 to 1994.
Reed Bell, Sr., M.D. - Medical Doctor and since 1989, employee of the State of
Florida. He serves as Medical Director of Children's Medical Services, District
1. He previously served as Medical Director of the Escambia County Public Health
Unit until 1992.
Paul J. DeNicola - President and Chief Executive Officer of SCS since 1994. He
previously served as Executive Vice President of SCS from 1991 through 1993 and
President and Chief Executive Officer of MISSISSIPPI from 1989 to 1991. Director
of SOUTHERN, MISSISSIPPI and SAVANNAH.
Fred C. Donovan - President of Baskerville - Donovan, Inc., Pensacola, Florida,
an architectural and engineering firm. Director of Baptist Health Care, Inc.
W. D. Hull, Jr. - Vice Chairman of the SunTrust Bank, West Florida, Panama City,
Florida. He previously served as President and Chief Executive Officer and
Director of the Sun Commercial Bank, Panama City, Florida from 1989 to 1992.
C. W. Ruckel - Chairman of the Board of The Vanguard Bank and Trust Company,
Valparaiso, Florida. President and owner of Ruckel Properties, Inc., Valparaiso,
Florida.
J. K. Tannehill - President and Chief Executive Officer of Merrick International
Industries, Lynn Haven, Florida. He previously served as President and Chief
Executive Officer of Stock Equipment Company, Chagrin Falls, Ohio, until 1991.
Director of Florida First Bank, Panama City, Florida.
F. M. Fisher, Jr. - Elected Vice President - Employee and External Relations in
1989.
John E. Hodges, Jr. - Elected Vice President - Customer Operations in 1989.
Director of Barnett Bank of West Florida, Pensacola, Florida.
G. Edison Holland, Jr. - Elected Vice President and Corporate Counsel in 1992
and Vice President - Power Generation/Transmission and Corporate Counsel in
March 1995; responsible for generation and transmission of electric energy, all
legal matters associated with GULF and serves as compliance officer. Also
serves, since 1982, as a partner in the law firm, Beggs & Lane.
A. E. Scarbrough - Elected Vice President - Finance in 1980; responsible for all
accounting and financial services of GULF.
Involvement in certain legal proceedings.
None.
III-8
<PAGE>
MISSISSIPPI
Identification of directors of MISSISSIPPI.
Dwight H. Evans
President and Chief Executive Officer
Age 47
Served as Director since 3-27-95
Paul J. DeNicola (1)
Age 47
Served as Director since 5-1-89
Edwin E. Downer (1)
Age 64
Served as Director since 4-24-84
Robert S. Gaddis (1)
Age 64
Served as Director since 1-21-86
Walter H. Hurt, III (1)
Age 60
Served as Director since 4-6-82
Aubrey K. Lucas (1)
Age 61
Served as Director since 4-24-84
George A. Schloegel (1)
Age 55
Served as Director since 7-26-95
Philip J. Terrell (1)
Age 42
Served as Director since 2-22-95
N. Eugene Warr (1)
Age 60
Served as Director since 1-21-86
(1) No position other than Director.
Each of the above is currently a director of MISSISSIPPI, serving a term
running from the last annual meeting of MISSISSIPPI's stockholder (April 4,
1995) for one year until the next annual meeting or until a successor is elected
and qualified, except for Mr. Schloegel whose election was effective on the date
indicated.
There are no arrangements or understandings between any of the individuals
listed above and any other person pursuant to which he or she was or is to be
selected as a director or nominee, other than any arrangements or understandings
with directors or officers of MISSISSIPPI acting solely in their capacities as
such.
Identification of executive officers of MISSISSIPPI.
Dwight H. Evans
President, Chief Executive Officer and Director
Age 47
Served as Executive Officer since 3-27-95
H. E. Blakeslee
Vice President - Customer Services and Marketing
Age 55
Served as Executive Officer since 1-25-84
F. D. Kuester
Vice President - Power Generation and Delivery
Age 45
Served as Executive Officer since 3-28-94
Don E. Mason
Vice President - External Affairs and Corporate Services
Age 54
Served as Executive Officer since 7-27-83
Michael W. Southern
Vice President, Secretary, Treasurer and
Chief Financial Officer
Age 43
Served as Executive Officer since 1-1-95
Each of the above is currently an executive officer of MISSISSIPPI, serving
a term running from the last annual meeting of the directors (April 26, 1995)
for one year until the next annual meeting or until a successor is elected and
qualified.
There are no arrangements or understandings between any of the individuals
listed above and any other person pursuant to which he was or is to be selected
as an officer, other than any arrangements or understandings with officers of
MISSISSIPPI acting solely in their capacities as such.
Identification of certain significant employees.
None.
III-9
<PAGE>
Family relationships.
None.
Business experience.
Dwight H. Evans - President and Chief Executive Officer since March 1995. He
previously served as Executive Vice President of GEORGIA from 1989 to 1995.
Paul J. DeNicola - President and Chief Executive Officer of SCS effective 1994.
Executive Vice President of SCS from 1991 through 1993. He previously served as
President and Chief Executive Officer of MISSISSIPPI from 1989 to 1991. Director
of SOUTHERN, SAVANNAH and GULF.
Edwin E. Downer - Business consultant specializing in economic analysis,
management controls and procedural studies.
Robert S. Gaddis - President of the Trustmark National Bank, Laurel,
Mississippi.
Walter H. Hurt, III - President and Director of NPC Inc. (Investments). Vicar,
All Saints Church, Inverness, Mississippi, and St. Thomas Church, Belzoni,
Mississippi. Retired newspaper editor and publisher.
Aubrey K. Lucas - President of the University of Southern Mississippi,
Hattiesburg, Mississippi.
George A. Schloegel - President of Hancock Bank and Hancock Bank Securities
Corporation. Vice Chairman of Hancock Holding Company. Director of Hancock Bank
- - - Mississippi, Hancock Bank - Louisiana and First National Bank of Denham
Springs, Louisiana.
Philip J. Terrell - Superintendent of Pass Christian Public School District and
adjunct professor at William Carey College.
N. Eugene Warr - Retailer (Biloxi and Gulfport, Mississippi). He previously
served as Vice Chairman of the Board of SouthTrust Bank of Mississippi, formerly
The Jefferson Bank, Biloxi, Mississippi, from 1977 to 1995.
H. E. Blakeslee - Elected Vice President in 1984. Primarily responsible for
business development, rates and wholesale marketing, technical research,
district operations and the customer services center.
F. D. Kuester - Elected Vice President in 1994. Primarily responsible for
generating plants, environmental quality, fuel services, power generation
technical services, distribution, transmission, system planning, bulk power
contracts, system operations and control, system protection and real estate. He
previously served as Manager of Business and New Project Design/Development of
SCS from 1993 to 1994 and Vice President of SCS from 1990 to 1993.
Don E. Mason - Elected Vice President in 1983. Primarily responsible for
external affairs, corporate communications, security, risk management and
general services, as well as the human resources function.
Michael W. Southern - Elected Vice President, Secretary, Treasurer and Chief
Financial Officer in 1995, responsible primarily for accounting, treasury,
finance, materials and information resources. He previously served as Director
of Corporate Finance of SCS from 1994 to 1995 and Director of Financial Planning
of SCS from 1990 to 1994.
Involvement in certain legal proceedings.
None.
III-10
<PAGE>
SAVANNAH
Identification of directors of SAVANNAH.
Arthur M. Gignilliat, Jr.
President and Chief Executive Officer
Age 63
Served as Director since 9-1-82
Helen Quattlebaum Artley (1)
Age 68
Served as Director since 5-17-77
Paul J. DeNicola (1)
Age 47
Served as Director since 3-14-91
Brian R. Foster (1)
Age 46
Served as Director since 5-16-89
Walter D. Gnann (1)
Age 60
Served as Director since 5-17-83
Robert B. Miller, III (1)
Age 50
Served as Director since 5-17-83
Arnold M. Tenenbaum (1)
Age 59
Served as Director since 5-17-77
Frederick F. Williams, Jr. (1)
Age 68
Served as Director since 7-2-75
(1) No Position other than Director.
Each of the above is currently a director of SAVANNAH, serving a term
running from the last annual meeting of SAVANNAH's stockholder (May 16, 1995)
for one year until the next annual meeting or until a successor is elected and
qualified.
There are no arrangements or understandings between any of the individuals
listed above and any other person pursuant to which he/she was or is to be
selected as a director or nominee, other than any arrangements or understandings
with directors or officers of SAVANNAH acting solely in their capacities as
such.
Identification of executive officers of SAVANNAH.
Arthur M. Gignilliat, Jr.
President, Chief Executive Officer and Director
Age 63
Served as Executive Officer since 2-15-72
W. Miles Greer
Vice President - Marketing and Customer Services
Age 52
Served as Executive Officer since 11-20-85
Larry M. Porter
Vice President - Operations
Age 50
Served as Executive Officer since 7-1-91
Kirby R. Willis
Vice President, Treasurer and Chief Financial Officer
Age 44
Served as Executive Officer since 1-1-94
Each of the above is currently an executive officer of SAVANNAH, serving a
term running from the last annual meeting of the directors (July 19, 1995) for
one year until the next annual meeting or until his successor is elected and
qualified.
There are no arrangements or understandings between any of the individuals
listed above and any other person pursuant to which he was or is to be selected
as an officer, other than any arrangements or understandings with officers of
SAVANNAH acting solely in their capacities as such.
Identification of certain significant employees.
None.
Family relationships.
None.
Business experience.
Arthur M. Gignilliat, Jr. - Elected President and Chief Executive Officer in
1984. Director of Savannah Foods and Industries, Inc.
Helen Quattlebaum Artley - Homemaker and Civic Worker.
III-11
<PAGE>
Paul J. DeNicola - President and Chief Executive Officer of SCS since 1994.
Executive Vice President of SCS from 1991 through 1993. He previously served as
President and Chief Executive Officer of MISSISSIPPI from 1989 to 1991. Director
of SOUTHERN, GULF and MISSISSIPPI.
Brian R. Foster - President and Chief Executive Officer of NationsBank of
Georgia, N.A., in Savannah since 1988.
Walter D. Gnann - President of Walt's TV, Appliance and Furniture Co., Inc.,
Springfield, Georgia. Past Chairman of the Development Authority of Effingham
County, Georgia.
Robert B. Miller, III - President of American Building Systems, Inc.
Arnold M. Tenenbaum - President and Director of Chatham Steel Corporation.
Director of First Union National Bank of Georgia and Savannah Foods and
Industries, Inc.
Frederick F. Williams, Jr. - Retired Partner and Consultant, Hilb, Rogal and
Hamilton Employee Benefits, Incorporated (Insurance Brokers), formerly Jones,
Hill & Mercer.
W. Miles Greer - Vice President - Marketing and Customer Services effective
1994. Formerly served as Vice President - Economic Development and Corporate
Services from 1989 through 1993.
Larry M. Porter - Vice President - Operations since 1991. Responsible for
managing the areas of fuel procurement, power production, transmission and
distribution, engineering and system operation. Previously he served as
Assistant Plant Manager of GEORGIA's Plant Scherer from 1984 to 1991.
Kirby R. Willis - Vice President, Treasurer and Chief Financial Officer since
1994. Responsible for all financial activities, Information Resources, Human
Resources, Corporate Services, and Environmental Affairs and Safety. He
previously served as Treasurer, Controller and Assistant Secretary from 1991 to
1993 and Treasurer and Secretary from 1987 to 1991.
Involvement in certain legal proceedings.
None.
III-12
<PAGE>
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION
Summary Compensation Tables. The following tables set forth information
concerning any Chief Executive Officer and the four most highly compensated
executive officers whose total annual salary and bonus exceeded $100,000 during
1995 for each of the operating affiliates (ALABAMA, GEORGIA, GULF, MISSISSIPPI
and SAVANNAH).
<TABLE>
<CAPTION>
Key terms used in this Item will have the following meanings:-
<S> <C>
AME.........................................Above-market earnings on deferred compensation
ESP.........................................Employee Savings Plan
ESOP........................................Employee Stock Ownership Plan
SBP.........................................Supplemental Benefit Plan
ERISA.......................................Employee Retirement Income Security Act
</TABLE>
<TABLE>
<CAPTION>
ALABAMA
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG-TERM COMPENSATION
Number of
Securities Long-
Name Underlying Term
and Other Annual Stock Incentive All Other
Principal Compensation Options Payouts Compensation
Position Year Salary($) Bonus($) ($)1 (Shares) ($)2 ($)3
- - ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Elmer B. Harris
President,
Chief Executive 1995 458,940 74,204 5,956 32,170 494,447 26,058
Officer, 1994 436,280 96,711 13,882 31,441 236,642 24,467
Director 1993 418,818 117,630 23,469 26,892 198,131 39,388
Banks H. Farris 1995 221,405 76,182 4,239 9,856 174,727 11,889
Executive Vice 1994 203,508 38,828 52,567 8,331 41,134 9,864
President 1993 176,041 17,642 24,222 6,302 28,394 27,418
Charles D. McCrary 1995 206,400 69,380 2,549 9,188 141,834 11,071
Executive Vice 1994 189,718 35,459 4,254 7,767 38,195 10,260
President 1993 163,832 16,103 16,612 5,874 24,928 26,713
See next page for footnotes.
</TABLE>
III-13
<PAGE>
<TABLE>
<CAPTION>
ALABAMA
SUMMARY COMPENSATION TABLE
(Continued)
ANNUAL COMPENSATION LONG-TERM COMPENSATION
Number of
Securities Long-
Name Underlying Term
and Other Annual Stock Incentive All Other
Principal Compensation Options Payouts Compensation
Position Year Salary($) Bonus($) ($)1 (Shares) ($)2 ($)3
- - ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
William B.
Hutchins, III
Executive Vice
President, 1995 199,164 69,841 1,180 8,850 129,565 11,088
Chief Financial 1994 184,995 26,993 1,289 7,551 35,138 9,650
Officer 1993 164,972 16,103 14,791 5,896 26,429 26,817
- - --------------------
1 Tax reimbursement by ALABAMA and certain personal benefits, including membership fee of $44,014 for Mr. Farris in
1994.
2 Payouts made in 1994, 1995 and 1996 for the four-year performance periods ending December 31, 1993, 1994 and 1995,
respectively.
3 ALABAMA contributions to the ESP, ESOP, and non-pension related accruals under the SBP (ERISA excess plan under
which accruals are made to offset Internal Revenue Code imposed limitations under the ESP and ESOP) for the following:-
Name ESP ESOP SBP
Elmer B. Harris $6,750 $1,151 $18,157
Banks H. Farris 6,750 1,151 3,988
Charles D. McCrary 6,750 1,151 3,170
William B. Hutchins, III 6,750 1,151 3,187
</TABLE>
III-14
<PAGE>
<TABLE>
<CAPTION>
GEORGIA
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG-TERM COMPENSATION
Number of
Securities Long-
Name Underlying Term
and Other Annual Stock Incentive All Other
Principal Compensation Options Payouts Compensation
Position Year Salary($) Bonus($) ($)1 (Shares) ($)2 ($)3
- - ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
H. Allen Franklin
President, 1995 456,366 82,935 3,936 31,960 561,024 25,493
Chief Executive 1994 415,954 87,763 30,078 31,386 203,201 100,201
Officer, Director 1993 365,000 73,584 16,438 23,408 140,650 37,298
William G.
Hairston, III 1995 296,988 47,489 6,020 15,785 289,170 16,442
Executive 1994 287,831 44,521 3,225 15,725 81,662 14,593
Vice President 1993 234,454 53,202 15,925 11,782 54,126 30,475
Warren Y. Jobe
Executive
Vice President,
Treasurer, 1995 220,152 31,000 1,994 9,710 141,834 12,248
Chief Financial 1994 215,809 27,579 2,744 8,610 56,635 11,736
Officer, Director 1993 210,200 27,038 15,645 7,480 48,282 29,258
Gene R. Hodges 1995 214,502 32,000 1,978 9,514 141,834 11,160
Executive 1994 204,190 27,579 4,601 8,196 52,188 11,093
Vice President 1993 206,727 (4) 28,228 14,903 6,878 35,285 30,629
Robert H.
Haubein, Jr. 1995 199,759 34,000 1,623 8,871 129,565 10,825
Senior Vice 1994 184,470 32,391 3,115 7,165 34,836 9,924
President 1993 168,577 25,764 14,929 6,012 36,437 8,772
- - --------------------
1 Tax reimbursement by GEORGIA on certain personal benefits.
2 Payouts made in 1994, 1995 and 1996 for the four-year performance periods ending December 31, 1993,
1994 and 1995, respectively.
3 GEORGIA contributions to the ESP, ESOP, and non-pension related accruals under the SBP (ERISA excess plan
under which accruals are made to offset Internal Revenue Code imposed limitations under the ESP and ESOP) for
the following:-
Name ESP ESOP SBP
H. Allen Franklin $6,750 $1,151 $17,592
William G. Hairston, III 6,750 1,151 8,541
Warren Y. Jobe 6,843 1,151 4,254
Gene R. Hodges 6,750 1,151 3,259
Robert H. Haubein, Jr. 6,750 1,151 2,924
4 Mr. Hodges' 1993 salary included a retroactive pay adjustment of $15,717 to correct underpayment of his 1992 salary.
</TABLE>
III-15
<PAGE>
<TABLE>
<CAPTION>
GULF
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG-TERM COMPENSATION
Number of
Securities Long-
Name Underlying Term
and Other Annual Stock Incentive All Other
Principal Compensation Options Payouts Compensation
Position Year Salary($) Bonus($) ($)1 (Shares) ($)2 ($)3
- - ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Travis J. Bowden
President, 1995 289,749 29,077 4,663 15,464 233,237 16,679
Chief Executive 1994 282,513 42,849 42,015 15,134 86,730 115,241
Officer, Director 1993 257,089 23,161 16,118 12,238 61,524 31,271
G. Edison
Holland, Jr. 1995 177,682 16,718 2,463 7,851 103,474 9,491
Vice President, 1994 172,092 21,352 1,512 6,893 18,888 9,307
Corporate Counsel 1993 162,651 20,934 9,504 5,840 - 21,015
Arlan E. Scarbrough 1995 167,568 16,718 722 7,398 94,553 8,556
Vice President 1994 163,548 19,511 1,185 - 25,889 8,612
1993 155,565 19,129 11,582 - 22,072 24,729
John E. Hodges, Jr. 1995 164,738 16,718 2,272 7,307 103,474 9,040
Vice President 1994 156,831 21,352 1,999 5,455 37,776 8,733
1993 147,144 20,934 9,726 4,578 32,206 24,327
Francis M.
Fisher, Jr. 1995 141,389 16,718 510 5,603 94,553 7,694
Vice President 1994 135,307 17,812 586 - 23,635 5,576
1993 127,197 17,463 9,311 - 20,149 19,301
- - --------------------
1 Tax reimbursement by GULF on certain personal benefits.
2 Payouts made in 1994, 1995 and 1996 for the four-year performance periods ending December 31, 1993,
1994 and 1995, respectively.
3 GULF contributions to the ESP, ESOP, and non-pension related accruals under the SBP (ERISA excess plan under
which accruals are made to offset Internal Revenue Code imposed limitations under the ESP and ESOP) for the following:-
Name ESP ESOP SBP
Travis J. Bowden $6,750 $1,151 $8,778
G. Edison Holland, Jr. 6,750 1,151 1,590
Arlan E. Scarbrough 6,731 1,151 674
John E. Hodges, Jr. 6,750 1,151 1,139
Francis M. Fisher, Jr. 6,363 1,151 180
</TABLE>
III-16
<PAGE>
<TABLE>
<CAPTION>
MISSISSIPPI
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG-TERM COMPENSATION
Number of
Securities Long-
Name Underlying Term
and Other Annual Stock Incentive All Other
Principal Compensation Options Payouts Compensation
Position Year Salary($) Bonus($) ($)1 (Shares) ($)2 ($)3
- - ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Dwight H. Evans
President, Chief 1995 233,069 42,965 2,746 10,486 141,834 34,139
Executive 1994 215,887 35,459 2,318 8,610 56,635 11,812
Officer, Director 1993 210,544 34,763 14,642 7,498 48,282 29,519
H. E. Blakeslee 1995 168,651 29,358 952 7,598 103,474 9,161
Vice President 1994 156,204 23,808 1,055 5,509 37,776 8,494
1993 154,332 15,271 3,528 4,768 32,206 15,650
Don E. Mason 1995 163,901 29,358 794 7,445 94,553 8,830
Vice President 1994 150,162 22,069 686 - 25,889 8,080
1993 148,305 11,016 4,321 - 22,072 15,409
Frederick D. 1995 136,723 24,467 714 4,779 73,989 7,300
Kuester (4) 1994 127,590 16,481 1,781 - 16,588 19,121
Vice President 1993 - - - - - -
Michael W. Southern (5)
Vice President,
Chief Financial 1995 133,505 24,467 344 4,847 73,989 19,806
Officer, Secretary, 1994 - - - - - -
Treasurer 1993 - - - - - -
- - --------------------
1 Tax reimbursement by MISSISSIPPI on certain personal benefits.
2 Payouts made in 1994, 1995 and 1996 for the four-year performance periods ending December 31, 1993,
1994 and 1995, respectively.
3 MISSISSIPPI contributions to the ESP, ESOP, and non-pension related accruals under the SBP (ERISA excess plan
under which accruals are made to offset Internal Revenue Code imposed limitations under the ESP and ESOP) for the
following:-
Name ESP ESOP SBP
Dwight H. Evans $6,750 $1,151 $4,136
H. E. Blakeslee 6,750 1,151 1,260
Don E. Mason 6,750 1,151 929
Frederick D. Kuester 6,152 1,148 -
Michael W. Southern 6,222 1,144 -
Also included for Mr. Evans and Mr. Southern is a one-time lump-sum payment of $22,102 and $12,440, respectively, given in
connection with their appointment to their current positions.
4 Mr. Kuester was named an executive officer effective March 28, 1994.
5 Mr. Southern was named an executive officer effective January 1, 1995.
</TABLE>
III-17
<PAGE>
<TABLE>
<CAPTION>
SAVANNAH
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG-TERM COMPENSATION
Number of
Securities Long-
Name Underlying Term
and Other Annual Stock Incentive All Other
Principal Compensation Options Payouts Compensation
Position Year Salary($) Bonus($) ($)1 (Shares) ($)2 ($)3
- - ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Arthur M.
Gignilliat, Jr.
President, 1995 211,385 31,847 492 9,327 170,305 21,323
Chief Executive 1994 206,964 37,384 194 8,253 76,164 18,617
Officer, Director 1993 202,259 26,470 12,231 7,198 64,932 31,512
Larry M. Porter 1995 134,687 18,100 256 4,701 73,989 8,718
Vice President 1994 130,619 15,249 198 - 15,070 7,561
1993 126,133 10,070 7,251 - 7,810 21,570
W. Miles Greer 1995 125,891 18,225 355 4,393 68,215 8,376
Vice President 1994 122,153 14,050 198 - 14,527 7,642
1993 117,766 10,337 7,458 - 12,202 21,881
Kirby R. Willis4
Vice President, 1995 115,632 18,225 256 4,038 68,215 7,444
Chief Financial 1994 111,653 14,207 46 - 8,257 6,840
Officer, Treasurer 1993 - - - - - -
- - --------------------
1 Tax reimbursement by SAVANNAH on certain personal benefits.
2 Payouts made in 1994, 1995 and 1996 for the four-year performance periods ending December 31, 1993, 1994
and 1995, respectively.
3 SAVANNAH contributions to the ESP, under Section 401(k) of the Internal Revenue Code, ESOP, and AME for
the following:-
Name ESP ESOP AME
Arthur M. Gignilliat $6,750 $1,151 $13,422
Larry M. Porter 5,551 1,020 2,147
W. Miles Greer 5,130 1,031 2,215
Kirby R. Willis 4,736 865 1,843
4 Mr. Willis was named an executive officer effective in 1994.
</TABLE>
III-18
<PAGE>
<TABLE>
<CAPTION>
STOCK OPTION GRANTS IN 1995
Stock Option Grants. The following table sets forth all stock option grants to
the named executive officers of each operating subsidiary during the year ending
December 31, 1995.
Individual Grants Grant Date Value
# of % of Total
Securities Options Exercise
Underlying Granted to or
Options Employees in Base Price Expiration Grant Date
Name Granted (1) Fiscal Year (2) ($/Sh)1 Date (1) Present Value($)3
-------------------------------------------------------------------------------------------------------------
ALABAMA
<S> <C> <C> <C> <C> <C>
Elmer B. Harris 32,170 2.8 21.6250 07/17/2005 91,685
Banks H. Farris 9,856 0.9 21.6250 06/01/2003 21,585
Charles D. McCrary 9,188 0.8 21.6250 07/17/2005 26,186
William B. Hutchins, III 8,850 0.8 21.6250 07/17/2005 25,223
GEORGIA
H. Allen Franklin 31,960 2.8 21.6250 07/17/2005 91,086
William G. Hairston, III 15,785 1.4 21.6250 07/17/2005 44,987
Warren Y. Jobe 9,710 0.8 21.6250 07/17/2005 27,674
Gene R. Hodges 9,514 0.8 21.6250 07/17/2005 27,115
Robert H. Haubein, Jr. 8,871 0.8 21.6250 07/17/2005 25,282
GULF
Travis J. Bowden 15,464 1.3 21.6250 07/17/2005 44,072
G. Edison Holland, Jr. 7,851 0.7 21.6250 07/17/2005 22,375
A. E. Scarbrough 7,398 0.6 21.6250 11/01/2004 20,936
John E. Hodges, Jr. 7,307 0.6 21.6250 07/17/2005 20,825
Francis M. Fisher, Jr. 5,603 0.5 21.6250 07/17/2005 15,969
See next page for footnotes.
</TABLE>
III-19
<PAGE>
<TABLE>
<CAPTION>
STOCK OPTION GRANTS IN 1995
Individual Grants Grant Date Value
# of % of Total
Securities Options Exercise
Underlying Granted to or
Options Employees in Base Price Expiration Grant Date
Name Granted (1) Fiscal Year (2) ($/Sh)1 Date (1) Present Value($)3
-----------------------------------------------------------------------------------------------------------
MISSISSIPPI
<S> <C> <C> <C> <C> <C>
Dwight H. Evans 10,486 0.9 21.6250 07/17/2005 29,885
H. E. Blakeslee 7,598 0.7 21.6250 07/17/2005 21,654
Don E. Mason 7,445 0.6 21.6250 07/17/2005 21,218
Frederick D. Kuester 4,779 0.4 21.6250 07/17/2005 13,620
Michael W. Southern 4,847 0.4 21.6250 07/17/2005 13,814
SAVANNAH
Arthur M. Gignilliat, Jr. 9,327 0.8 21.6250 09/03/2000 24,343
Larry M. Porter 4,701 0.4 21.6250 07/17/2005 13,398
W. Miles Greer 4,393 0.4 21.6250 07/17/2005 12,520
Kirby R. Willis 4,038 0.4 21.6250 07/17/2005 11,508
- - --------------------
1 Grants were made on July 17, 1995, and vest 25% per year on the anniversary
date of the grant. Grants fully vest upon termination incident to death,
disability, or retirement. The exercise price is the average of the high and low
fair market value of SOUTHERN's common stock on the date granted. In accordance
with the terms of the Executive Stock Plan, Mr. Farris' unexercised options
expire on June 1, 2003, three years after his normal retirement date; Mr.
Scarborough's unexercised options expire on November 1, 2004, three years after
his normal retirement date; and Mr. Gignilliat's unexercised options expire on
September 3, 2000, three years after his normal retirement date.
2 A total of 1,161,174 stock options were granted in 1995 to key executives
participating in SOUTHERN's Executive Stock Plan.
3 Based on the Black-Scholes option valuation model. The actual value, if any,
an executive officer may realize ultimately depends on the market value of
SOUTHERN's common stock at a future date. This valuation is provided pursuant
to SEC disclosure rules. There is no assurance that the value realized will be
at or near the value estimated by the Black-Scholes model. Assumptions used to
calculate this value: price volatility - 16.323%; risk-free rate of
return - 6.28%; dividend yield - 5.64%; and time to exercise - 10 years.
</TABLE>
III-20
<PAGE>
<TABLE>
<CAPTION>
AGGREGATED STOCK OPTION EXERCISES IN 1995 AND YEAR-END OPTION VALUES
Aggregated Stock Option Exercises. The following table sets forth information
concerning options exercised during the year ending December 31, 1995, by the
named executive officers and the value of unexercised options held by them as of
December 31, 1995.
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
Fiscal Fiscal
Year-End (#) Year-End($)1
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise (#) Realized($)2 Unexercisable Unexercisable
- - ---------------------------------------------------------------------------------------------------------------
ALABAMA
<S> <C> <C> <C> <C>
Elmer B. Harris - - 90,131/76,706 756,465/326,944
Banks H. Farris - - 10,412/20,983 56,530/115,888
Charles D. McCrary - - 9,024/19,333 48,243/80,094
William B. Hutchins, III - - 9,074/18,875 48,577/78,388
GEORGIA
H. Allen Franklin - - 64,202/72,046 519,295/302,725
William G. Hairston, III 15,253 95,787 5,891/35,574 20,066/148,978
Warren Y. Jobe 5,437 40,648 12,734/22,017 80,956/92,777
Gene R. Hodges 5,908 38,672 9,473/20,903 58,796/87,377
Robert H. Haubein, Jr. - - 9,810/18,922 53,278/78,666
GULF
Travis J. Bowden - - 37,205/36,335 302,024/154,715
G. Edison Holland, Jr. - - 8,835/17,339 47,228/72,357
Arlan E. Scarbrough - - 0/7,398 0/22,194
John E. Hodges, Jr. 13,232 142,984 7,450/14,954 40,440/61,515
Francis M. Fisher, Jr. - - 0/5,603 0/16,809
See next page for footnotes.
</TABLE>
III-21
<PAGE>
<TABLE>
<CAPTION>
AGGREGATED STOCK OPTION EXERCISES IN 1995 AND YEAR-END OPTION VALUES
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
Fiscal Fiscal
Year-End (#) Year-End($)1
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise (#) Realized($)2 Unexercisable Unexercisable
- - -------------------------------------------------------------------------------------------------------------
MISSISSIPPI
<S> <C> <C> <C> <C>
Dwight H. Evans 4,495 34,347 12,564/22,797 79,095/95,103
H. E. Blakeslee 4,622 36,679 7,724/15,435 41,921/63,301
Don E. Mason - - 0/7,445 0/22,335
Frederick D. Kuester - - 0/4,779 0/14,337
Michael W. Southern - - 0/4,847 0/14,541
SAVANNAH
Arthur M. Gignilliat, Jr. - - 34,551/21,145 317,335/89,084
Larry M. Porter - - 0/4,701 0/14,103
W. Miles Greer - - 0/4,393 0/13,179
Kirby R. Willis - - 0/4,038 0/12,114
- - --------------------
1 This represents the excess of the fair market value of SOUTHERN's common stock
of $24.625 per share, as of December 31, 1995, above the exercise price of the
options. One column reports the "value" of options that are vested and therefore
could be exercised; the other the "value" of options that are not vested and
therefore could not be exercised as of December 31, 1995.
2 The "Value Realized" is ordinary income, before taxes, and represents
the amount equal to the excess of the fair market value of the shares at the
time of exercise over the exercise price.
</TABLE>
III-22
<PAGE>
<TABLE>
<CAPTION>
LONG-TERM INCENTIVE PLANS - AWARDS IN 1995
Long-Term Incentive Plans. The following table sets forth the long-term
incentive plan awards made to the named executive officers for the performance
period January 1, 1995 through December 31, 1998.
Estimated Future Payouts under
Non-Stock Price-Based Plans
Performance or
Other Period
Number of Until Maturation Threshold Target Maximum
Name Units (#)1 or Payout ($)2 ($)2 ($)2
- - -----------------------------------------------------------------------------------------------------------------
ALABAMA
<S> <C> <C> <C> <C> <C>
Elmer B. Harris 274,693 4 years 137,347 274,693 549,386
Banks H. Farris 97,070 4 years 48,535 97,070 194,140
Charles D. McCrary 78,797 4 years 39,399 78,797 157,594
William B. Hutchins, III 71,981 4 years 35,991 71,981 143,962
GEORGIA
H. Allen Franklin 311,680 4 years 155,840 311,680 623,360
William G. Hairston, III 160,650 4 years 80,325 160,650 321,300
Warren Y. Jobe 78,797 4 years 39,399 78,797 157,594
Gene R. Hodges 78,797 4 years 39,399 78,797 157,594
Robert H. Haubein, Jr. 71,981 4 years 35,991 71,981 143,962
GULF
Travis J. Bowden 129,576 4 years 64,788 129,576 259,152
G. Edison Holland, Jr. 57,485 4 years 28,743 57,485 114,970
Arlan E. Scarbrough 52,529 4 years 26,265 52,529 105,058
John E. Hodges, Jr. 57,485 4 years 28,743 57,485 114,970
Francis M. Fisher, Jr. 52,529 4 years 26,265 52,529 105,058
See next page for footnotes.
</TABLE>
III-23
<PAGE>
<TABLE>
<CAPTION>
LONG-TERM INCENTIVE PLANS - AWARDS IN 1995
Estimated Future Payouts under
Non-Stock Price-Based Plans
Performance or
Other Period
Number of Until Maturation Threshold Target Maximum
Name Units (#)1 or Payout ($)2 ($)2 ($)2
- - -----------------------------------------------------------------------------------------------------------------
MISSISSIPPI
<S> <C> <C> <C> <C> <C>
Dwight H. Evans 78,797 4 years 39,399 78,797 157,594
H. E. Blakeslee 57,485 4 years 28,743 57,485 114,970
Don E. Mason 52,529 4 years 26,265 52,529 105,058
Frederick D. Kuester 41,105 4 years 20,553 41,105 82,210
Michael W. Southern 41,105 4 years 20,553 41,105 82,210
SAVANNAH
Arthur M. Gignilliat, Jr. 94,614 4 years 47,307 94,614 189,228
Larry M. Porter 41,105 4 years 20,553 41,105 82,210
W. Miles Greer 37,897 4 years 18,949 37,897 75,794
Kirby R. Willis 37,897 4 years 18,949 37,897 75,794
- - --------------------
1 A performance unit is a method of assigning a dollar value to a performance
award opportunity. The actual number of units granted to a participant will be
based on an award percentage of an individual's base salary range control mid-point
at the beginning of the performance period.
2 The threshold, target and maximum value of a unit is $0.50, $1.00, and $2.00,
respectively, and can vary based on SOUTHERN's return on common equity relative
to a selected group of electric and gas utilities in the Southeastern United
States. If certain minimum performance relative to the selected group is not
achieved, there will be no payout; nor is there a payout if the current earnings
of SOUTHERN are not sufficient to fund the dividend rate paid in the last
calendar year. All awards are payable in cash at the end of the performance period.
</TABLE>
III-24
<PAGE>
DEFINED BENEFIT OR ACTUARIAL PLAN DISCLOSURE
Pension Plan Table. The following table sets forth the estimated combined annual
pension benefits under the pension and supplemental defined benefit plans in
effect during 1995 for ALABAMA, GEORGIA, GULF and MISSISSIPPI. Employee
compensation covered by the pension and supplemental benefit plans for pension
purposes is limited to the average of the highest three of the final 10 years'
base salary and wages (reported under column titled "Salary" in the Summary
Compensation Tables on pages III-13 through III-18).
The amounts shown in the table were calculated according to the final
average pay formula and are based on a single life annuity without reduction for
joint and survivor annuities (although married employees are required to have
their pension benefits paid in one of various joint and survivor annuity forms,
unless the employee elects otherwise with the spouse's consent) or computation
of the Social Security offset which would apply in most cases. This offset
amounts to one-half of the estimated Social Security benefit (primary insurance
amount) in excess of $3,000 per year times the number of years of accredited
service, divided by the total possible years of accredited service to normal
retirement age.
<TABLE>
<CAPTION>
Years of Accredited Service
Remuneration 15 20 25 30 35 40
- - ------------ -----------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
$ 50,000 $ 12,750 $ 17,000 $ 21,250 $ 25,500 $ 29,750 $ 34,000
$100,000 25,500 34,000 42,500 51,000 59,500 68,000
$300,000 76,500 102,000 127,500 153,000 178,500 204,000
$500,000 127,500 170,000 212,500 255,000 297,500 340,000
$700,000 178,500 238,000 297,500 357,000 416,500 476,000
$800,000 204,000 272,000 340,000 408,000 476,000 544,000
</TABLE>
As of December 31, 1995, the applicable compensation levels and years
of accredited service are presented in the following tables:
<TABLE>
<CAPTION>
ALABAMA
Compensation
Name Level Years of Service
<S> <C> <C>
Elmer B. Harris $442,020 37
Banks H. Farris 204,096 36
Charles D. McCrary 190,260 21
William B. Hutchins, III 186,096 26
</TABLE>
III-25
<PAGE>
<TABLE>
<CAPTION>
GEORGIA
Compensation
Name Level Years of Service
<S> <C> <C>
H. Allen Franklin $422,496 24
William G. Hairston, III 301,752 27
Warren Y. Jobe 216,444 24
Gene R. Hodges 205,800 31
Robert H. Haubein, Jr. 187,728 28
GULF
Compensation
Name Level Years of Service
Travis J. Bowden $278,712 29 (1)
G. Edison Holland, Jr. 172,464 13 (1)
Arlan E. Scarbrough 163,560 32
John E. Hodges, Jr. 158,052 29
Francis M. Fisher, Jr. 136,128 24
MISSISSIPPI
Compensation
Name Level Years of Service
Dwight H. Evans $222,504 24
H. E. Blakeslee 159,984 29
Don E. Mason 155,184 29
Frederick D. Kuester 133,020 23
Michael W. Southern 127,308 20
</TABLE>
SAVANNAH has in effect a qualified, trusteed, noncontributory, defined
benefit pension plan which provides pension benefits to employees upon
retirement at the normal retirement age after designated periods of accredited
service and at a specified compensation level. The plan provides pension
benefits under a formula which includes each participant's years of service with
the Southern system and average annual earnings of the highest three of the
final 10 years of service with the Southern system preceding retirement. Plan
benefits are reduced by a portion of the benefits participants are entitled to
receive under Social Security. The plan provides for reduced early retirement
benefits at age 55 and a pension for the surviving spouse equal to one-half of
the deceased retiree's pension.
The following table sets forth the estimated annual pension benefits
under the pension plan in effect during 1995 which are payable by SAVANNAH to
employees upon retirement at the normal retirement age after designated periods
of accredited service and at a specified compensation level.
- - --------------------
1 The number of accredited years of service includes 10 years credited to
both Mr. Bowden and Mr. Holland pursuant to individual supplemental pension
agreements.
III-26
<PAGE>
<TABLE>
<CAPTION>
Average Annual Salary Annual Benefits Exclusive of Social Security (2)
for Last 36 Months of Years of Service
Employment 15 25 35
- - ------------------------ -------------------------------------------------
<S> <C> <C> <C>
$ 90,000 $22,505 $ 37,508 $ 52,511
$120,000 30,006 50,010 70,014
$150,000 37,508 62,513 87,518
$180,000 45,009 75,015 105,021
$210,000 52,511 87,518 122,525
$250,000 62,513 104,188 145,863
</TABLE>
As of December 31, 1995, the applicable compensation levels and years
of accredited service are presented in the following table:-
<TABLE>
<CAPTION>
SAVANNAH
Compensation
Name Level Years of Service
<S> <C> <C>
Arthur M. Gignilliat $184,696 37
Larry M. Porter 118,042 18
W. Miles Greer 113,901 11
Kirby R. Willis 99,952 21
</TABLE>
Deferred Compensation Plan; Supplemental Executive Retirement Plan.
SAVANNAH has in effect a voluntary deferred compensation plan for
certain executive employees pursuant to which such employees may defer a portion
of their respective annual salaries. In addition, SAVANNAH has a supplemental
executive retirement plan for certain of its executive employees which became
effective January 1, 1984. The deferred compensation plan is designed to provide
supplemental retirement or survivor benefit payments. The supplemental executive
retirement plan is also designed to provide retiring executives of SAVANNAH with
a supplemental retirement benefit, which, in conjunction with social security
and benefits under SAVANNAH's qualified pension plan, will equal 70 percent of
the highest three of the final 10 years' average annual compensation (including
deferrals under the deferred compensation plan). Both of these plans are
unfunded and the liability is payable from general funds of SAVANNAH. The
deferred compensation plan became effective December 1, 1983, and all of
SAVANNAH's executive officers are participating in the plan. In addition, all
executives are participating in the supplemental executive retirement plan.
In order to provide for its liabilities under the deferred compensation
plan and the supplemental executive retirement plan, SAVANNAH has purchased life
insurance on participating executive employees in actuarially determined amounts
which, based upon assumptions as to mortality experience, policy dividends, tax
effects, and other factors which, if realized, along with compensation deferred
by employees and the death benefits payable to SAVANNAH, are expected to cover
all such insurance premium payments, and all benefit payments to participants,
plus a factor for the cost of funds of SAVANNAH.
- - --------------------
2 The plan benefits are subject to the maximum benefit limitations set forth
in Section 415 of the Internal Revenue Code.
III-27
<PAGE>
Compensation of Directors.
Standard Arrangements. The following table presents compensation paid
to the directors, during 1995 for service as a member of the board of directors
and any board committee(s), except that employee directors received no fees or
compensation for service as a member of the board of directors or any board
committee. All or a portion of these fees may be deferred until membership on
the board is terminated.
<TABLE>
<CAPTION>
ALABAMA GEORGIA GULF MISSISSIPPI SAVANNAH
<S> <C> <C> <C> <C> <C>
Retainer Fee $20,000 $23,000 $12,000 $12,000 $12,000
Meeting Fee 900 900 750 750 750
Committees:
Audit 900 900 750 750 750
Compensation 900 900 750 750 750
Executive 900 900 - - 750
Finance - 900 - 750 -
Nominating 900 - - - -
Nuclear Safety 900 - - - -
Nuclear Operations
Overview - 1,800 - - -
</TABLE>
ALABAMA, GEORGIA, GULF, MISSISSIPPI and SAVANNAH also provide
retirement benefits to non-employee directors who are credited with a minimum of
60 months of service on the board of directors of one or more system companies,
under the Outside Directors Pension Plan. Eligible directors are entitled to
benefits under the Plan upon retirement from the board on the retirement date
designated in the respective companies' by-laws. The annual benefit payable is
based upon length of service and varies from 75 to 100 percent of the annual
retainer fee in effect on the date of retirement. Payments continue for the
greater of the lifetime of the participant or 10 years.
Other Arrangements. No director received other compensation for
services as a director during the year ending December 31, 1995 in addition to
or in lieu of that specified by the standard arrangements specified above.
Employment Contracts and Termination of Employment and Change in Control
Arrangements.
None.
Report on Repricing of Options.
None.
III-28
<PAGE>
Additional Information with Respect to Compensation Committee Interlocks and
Insider Participation in Compensation Decisions.
ALABAMA
Elmer B. Harris serves on the Compensation Committee of
AmSouth Bancorporation. John W. Woods, a director of ALABAMA, served
as Chairman and Chief Executive Officer of AmSouth Bancorporation
during 1995.
III-29
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Security ownership of certain beneficial owners. SOUTHERN is the beneficial
owner of 100% of the outstanding common stock of registrants: ALABAMA, GEORGIA,
GULF, MISSISSIPPI and SAVANNAH.
<TABLE>
<CAPTION>
Amount and
Name and Address Nature of Percent
of Beneficial Beneficial of
Title of Class Owner Ownership Class
<S> <C> <C> <C>
Common Stock The Southern Company 100%
270 Peachtree Street, N.W.
Atlanta, Georgia 30303
Registrants:
ALABAMA 5,608,955
GEORGIA 7,761,500
GULF 992,717
MISSISSIPPI 1,121,000
SAVANNAH 10,844,635
</TABLE>
Security ownership of management. The following table shows the number of shares
of SOUTHERN common stock and operating subsidiary preferred stock owned by the
directors, nominees and executive officers as of December 31, 1995. It is based
on information furnished by the directors, nominees and executive officers. The
shares owned by all directors, nominees and executive officers as a group
constitute less than one percent of the total number of shares of the respective
classes outstanding on December 31, 1995.
<TABLE>
<CAPTION>
Name of Directors,
Nominees and Number of Shares
Executive Officers Title of Class Beneficially Owned (1,2)
ALABAMA
<S> <C> <C>
Whit Armstrong SOUTHERN Common 14,055
Philip E. Austin SOUTHERN Common 138
Margaret A. Carpenter SOUTHERN Common 138
A. William Dahlberg SOUTHERN Common 139,108
Peter V. Gregerson, Sr. SOUTHERN Common 138
Bill M. Guthrie SOUTHERN Common 110,654
</TABLE>
III-30
<PAGE>
<TABLE>
<CAPTION>
Name of Directors,
Nominees and Number of Shares
Executive Officers Title of Class Beneficially Owned (1,2)
<S> <C> <C>
Elmer B. Harris SOUTHERN Common 138,012
Carl E. Jones, Jr. SOUTHERN Common 8,997
Wallace D. Malone SOUTHERN Common 133
William V. Muse SOUTHERN Common 138
John T. Porter SOUTHERN Common 221
Gerald H. Powell SOUTHERN Common 5,741
Robert Davis Powers SOUTHERN Common 138
John W. Rouse, Jr. SOUTHERN Common 7,741
William J. Rushton, III SOUTHERN Common 6,573
ALABAMA Preferred 20
James H. Sanford SOUTHERN Common 133
John C. Webb, IV SOUTHERN Common 12,172
ALABAMA Preferred 122
John W. Woods SOUTHERN Common 164
Banks H. Farris SOUTHERN Common 46,217
William B. Hutchins, III SOUTHERN Common 29,071
Charles D. McCrary SOUTHERN Common 16,145
The directors, nominees,
and executive officers
as a group SOUTHERN Common 535,827
ALABAMA Preferred 142
GEORGIA
Bennett A. Brown SOUTHERN Common 9,169
A. William Dahlberg SOUTHERN Common 139,108
</TABLE>
III-31
<PAGE>
<TABLE>
<CAPTION>
Name of Directors,
Nominees and Number of Shares
Executive Officers Title of Class Beneficially Owned (1,2)
<S> <C> <C>
W. A. Fickling, Jr. SOUTHERN Common 387
GEORGIA Preferred 50
H. Allen Franklin SOUTHERN Common 86,620
L. G. Hardman III SOUTHERN Common 7,494
Warren Y. Jobe SOUTHERN Common 40,766
GEORGIA Preferred 403
James R. Lientz, Jr. SOUTHERN Common 143
W. A. Parker, Jr. SOUTHERN Common 26,612
GEORGIA Preferred 2
G. Joseph Prendergast SOUTHERN Common 169
Herman J. Russell SOUTHERN Common 5,415
Gloria M. Shatto SOUTHERN Common 14,648
GEORGIA Preferred 1,200
W. J. Vereen SOUTHERN Common 5,231
GEORGIA Preferred 3,301
Carl Ware SOUTHERN Common 197
Thomas R. Williams SOUTHERN Common 101
GEORGIA Preferred 1,000
William G. Hairston, III SOUTHERN Common 22,875
Robert H. Haubein, Jr. SOUTHERN Common 18,179
Gene R. Hodges SOUTHERN Common 37,436
GEORGIA Preferred 800
The directors, nominees
and executive officers
as a group SOUTHERN Common 505,637
GEORGIA Preferred 6,756
</TABLE>
III-32
<PAGE>
<TABLE>
<CAPTION>
Name of Directors,
Nominees and Number of Shares
Executive Officers Title of Class Beneficially Owned (1,2)
GULF
<S> <C> <C>
Reed Bell, Sr., M.D. SOUTHERN Common 139
Travis J. Bowden SOUTHERN Common 65,518
Paul J. DeNicola SOUTHERN Common 62,502
Fred C. Donovan SOUTHERN Common 139
W. Deck Hull, Jr. SOUTHERN Common 2,333
C. Walter Ruckel SOUTHERN Common 139
Joseph K. Tannehill SOUTHERN Common 4,139
Francis M Fisher, Jr. SOUTHERN Common 4,603
GULF Preferred 2
John E. Hodges, Jr. SOUTHERN Common 28,067
GULF Preferred 3
G. Edison Holland, Jr. SOUTHERN Common 9,920
Arlan E. Scarbrough SOUTHERN Common 20,232
The directors, nominees
and executive officers
as a group SOUTHERN Common 197,731
GULF Preferred 5
MISSISSIPPI
Paul J. DeNicola SOUTHERN Common 62,502
Edwin E. Downer SOUTHERN Common 1,447
Dwight H. Evans SOUTHERN Common 30,247
GEORGIA Preferred 300
Robert S. Gaddis SOUTHERN Common 3,483
</TABLE>
III-33
<PAGE>
<TABLE>
<CAPTION>
Name of Directors,
Nominees and Number of Shares
Executive Officers Title of Class Beneficially Owned (1,2)
<S> <C> <C>
Walter H. Hurt, III SOUTHERN Common 986
MISSISSIPPI Preferred 33
Aubrey K. Lucas SOUTHERN Common 2,583
George A. Schloegel SOUTHERN Common 36
Philip J. Terrell SOUTHERN Common 91
N. Eugene Warr SOUTHERN Common 279
H. E. Blakeslee SOUTHERN Common 17,529
Frederick D. Kuester SOUTHERN Common 10,654
Don E. Mason SOUTHERN Common 19,283
Michael W. Southern SOUTHERN Common 4,254
The directors, nominees
and executive officers
as a group SOUTHERN Common 153,374
GEORGIA Preferred 300
MISSISSIPPI Preferred 33
SAVANNAH
Helen Quattlebaum Artley SOUTHERN Common 2,557
Paul J. DeNicola SOUTHERN Common 62,502
Brian R. Foster SOUTHERN Common 139
Arthur M. Gignilliat, Jr. SOUTHERN Common 56,898
Walter D. Gnann SOUTHERN Common 1,448
Robert B. Miller, III SOUTHERN Common 2,220
Arnold M. Tenenbaum SOUTHERN Common 493
Fred F. Williams SOUTHERN Common 2,147
</TABLE>
III-34
<PAGE>
<TABLE>
<CAPTION>
Name of Directors,
Nominees and Number of Shares
Executive Officers Title of Class Beneficially Owned (1,2)
<S> <C> <C>
W. Miles Greer SOUTHERN Common 1,768
Larry M. Porter SOUTHERN Common 13,192
Kirby R. Willis SOUTHERN Common 4,017
The directors, nominees
and executive officers
as a group SOUTHERN Common 147,381
Changes in control. SOUTHERN and the operating affiliates know of no
arrangements which may at a subsequent date result in any change in control.
- - --------------------
1 As used in this table, "beneficial ownership" means the sole or shared power to vote, or to direct the
voting of, a security and/or investment power with respect to a security (i.e., the power to dispose of, or to
direct the disposition of, a security).
2 The shares shown include shares of SOUTHERN common stock of which certain directors and executive officers
have the right to acquire beneficial ownership within 60 days pursuant to the Executive Stock Plan, as follows:
Mr. Blakeslee, 7,724 shares; Mr. Bowden, 37,205 shares; Mr. Dahlberg, 83,184 shares; Mr. DeNicola, 30,918 shares;
Mr. Evans, 12,564 shares; Mr. Farris, 10,412 shares; Mr. Franklin, 64,202 shares; Mr. Gignilliat, 34,551 shares;
Mr. Guthrie, 59,311 shares; Mr. Hairston, 5,891 shares; Mr. Harris, 90,131 shares; Mr. Haubein, 9,810 shares; Mr.
G. R. Hodges, 9,473 shares; Mr. J. E. Hodges, 7,450 shares; Mr. Holland, 8,835 shares; Mr. Hutchins, 9,074
shares; Mr. Jobe, 12,734 shares; and Mr. McCrary, 9,024 shares. Also included are shares of SOUTHERN common
stock held by the spouses of the following directors: Mr. Hardman, 100 shares; Mr. Harris, 310 shares; Mr.
Parker, 51 shares; Mr. Powers, 50 shares; and Dr. Shatto, 11,985 shares. Also included are 1,200 shares of
GEORGIA preferred stock held by Dr. Shatto's spouse.
</TABLE>
III-35
<PAGE>
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ALABAMA
Transactions with management and others.
Mr. Whit Armstrong is President, Chairman and Chief Executive Officer of
The Citizens Bank, Enterprise, Alabama; Mr. Carl E. Jones, Jr. is Chairman and
Chief Executive Officer of First Alabama Bank, Mobile, Alabama; Mr. Wallace D.
Malone is Chairman and Chief Executive Officer of SouthTrust Corporation,
Birmingham, Alabama, and Mr. John W. Woods is Chairman of AmSouth
Bancorporation, Birmingham, Alabama, and during 1995, Mr. Woods also served as
Chief Executive Officer of AmSouth Bancorporation. During 1995, these banks
furnished a number of regular banking services in the ordinary course of
business to ALABAMA. ALABAMA intends to maintain normal banking relations with
all the aforesaid banks in the future.
Certain business relationships.
None.
Indebtedness of management.
None.
Transactions with promoters.
None.
GEORGIA
Transactions with management and others.
Mr. L. G. Hardman III is Chairman of the Board of The First National Bank
of Commerce, Georgia; Mr. James R. Lientz, Jr. is President of NationsBank of
Georgia, Atlanta, Georgia; Mr. G. Joseph Prendergast is Chairman of Wachovia
Bank of Georgia, N.A., Atlanta, Georgia; and Mr. Herman J. Russell is Chairman
of the Board of Citizens Trust Bank, Atlanta, Georgia. During 1995, these banks
furnished a number of regular banking services in the ordinary course of
business to GEORGIA. GEORGIA intends to maintain normal banking relations with
all the aforesaid banks in the future.
In 1995, GEORGIA leased a building from Riverside Manufacturing Co. for
approximately $75,000. Mr. William J. Vereen is Chief Executive Officer,
President, Treasurer and Director of Riverside Manufacturing Co.
Certain business relationships.
None.
Indebtedness of management.
None.
Transactions with promoters.
None.
GULF
Transactions with management and others.
Mr. W. D. Hull, Jr. is Vice Chairman of SunTrust Bank, West Florida, Panama
City, Florida, and Mr. C. W. Ruckel is Chairman of the Board of The Vanguard
Bank and Trust Company, Valparaiso, Florida. During 1995, these banks furnished
a number of regular banking services in the ordinary course of business to GULF.
GULF intends to maintain normal banking relations with the aforesaid banks in
the future.
The firm of Beggs & Lane, P.A. serves as local counsel for GULF and
received from GULF approximately $1,034,573 for services rendered. Mr. G. Edison
Holland, Jr. is a partner in the firm and also serves as Vice President - Power
Generation/Transmission and Corporate Counsel of GULF.
Certain business relationships.
None.
Indebtedness of management.
None.
Transactions with promoters.
None.
MISSISSIPPI
Transactions with management and others.
Mr. Robert S. Gaddis is President of Trustmark National Bank, Laurel,
Mississippi; Mr. George A. Schloegel is President of Hancock Bank, Gulfport,
Mississippi; and during 1995, Mr. N. Eugene Warr served as Vice Chairman of the
Board of SouthTrust Bank of Mississippi, Biloxi, Mississippi. During 1995, these
banks furnished a number of regular banking services in the ordinary course of
business to MISSISSIPPI. MISSISSIPPI intends to maintain normal banking
relations with the aforesaid banks in the future.
III-36
<PAGE>
Certain business relationships.
None.
Indebtedness of management.
None.
Transactions with promoters.
None.
SAVANNAH
Transactions with management and others.
Mr. Brian R. Foster is President and Chief Executive Officer of NationsBank
of Georgia, N.A., in Savannah, Georgia. During 1995, this bank furnished a
number of regular banking services in the ordinary course of business to
SAVANNAH. SAVANNAH intends to maintain normal banking relations with the
aforesaid bank in the future.
Certain business relationships.
None.
Indebtedness of management.
None.
Transactions with promoters.
None.
III-37
<PAGE>
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) The following documents are filed as a part of this report on this Form
10-K:
(1) Financial Statements:
Reports of Independent Public Accountants on the financial statements
for SOUTHERN and Subsidiary Companies, ALABAMA, GEORGIA, GULF,
MISSISSIPPI and SAVANNAH are listed under Item 8 herein.
The financial statements filed as a part of this report for SOUTHERN
and Subsidiary Companies, ALABAMA, GEORGIA, GULF, MISSISSIPPI and
SAVANNAH are listed under Item 8 herein.
(2) Financial Statement Schedules:
Reports of Independent Public Accountants as to Schedules for SOUTHERN
and Subsidiary Companies, ALABAMA, GEORGIA, GULF, MISSISSIPPI and
SAVANNAH are included herein on pages IV-12 through IV-17.
Financial Statement Schedules for SOUTHERN and Subsidiary Companies,
ALABAMA, GEORGIA, GULF, MISSISSIPPI and SAVANNAH are listed in the
Index to the Financial Statement Schedules at page S-1.
(3) Exhibits:
Exhibits for SOUTHERN, ALABAMA, GEORGIA, GULF, MISSISSIPPI and SAVANNAH
are listed in the Exhibit Index at page E-1.
(b) Reports on Form 8-K: During the fourth quarter of 1995, SOUTHERN filed the
following Current Reports on Form 8-K and Form 8-K/A:
Form 8-K filed October 3, 1995:
Items reported: Item 2
Item 7
Financial statements filed:
SWEB Consolidated Balance Sheet at March 31, 1995
SWEB Consolidated Profit and Loss Account Statement for the Year
Ended March 31, 1995
SWEB Consolidated Statement of Cash Flows for the Year Ended
March 31, 1995
Form 8-K/A filed November 20, 1995:
Item reported: Item 7
Financial statements filed:
SOUTHERN and Subsidiary Companies Condensed Balance Sheet at
September 30, 1995, incorporated by reference to Form 10-Q for
the Quarter Ended September 30, 1995
SOUTHERN and Subsidiary Companies Pro Forma Condensed
Consolidated Statements of Income (Unaudited) for the Nine
Months Ended September 30, 1995 and for the Twelve Months
Ended December 31, 1995
IV-1
<PAGE>
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized. The signature of the
undersigned company shall be deemed to relate only to matters having reference
to such company and any subsidiaries thereof.
THE SOUTHERN COMPANY
By: A. W. Dahlberg, Chairman, President and
Chief Executive Officer
By: /s/Wayne Boston
(Wayne Boston, Attorney-in-fact)
Date: March 22, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated. The signature of each of the
undersigned shall be deemed to relate only to matters having reference to the
above-named company and any subsidiaries thereof.
A. W. Dahlberg
Chairman of the Board, President and
Chief Executive Officer
(Principal Executive Officer)
W. L. Westbrook
Financial Vice President, Chief Financial Officer and
Treasurer
(Principal Financial and Accounting Officer)
Directors:
John C. Adams Elmer B. Harris
A. D. Correll William A. Parker, Jr.
Paul J. DeNicola William J. Rushton, III
Jack Edwards Gloria M. Shatto
H. Allen Franklin Gerald J. St. Pe'
Bruce S. Gordon Herbert Stockham
L. G. Hardman III
By: /s/Wayne Boston
(Wayne Boston, Attorney-in-fact)
Date: March 22, 1996
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized. The signature of the
undersigned company shall be deemed to relate only to matters having reference
to such company and any subsidiaries thereof.
ALABAMA POWER COMPANY
By: Elmer B. Harris, President and
Chief Executive Officer
By: /s/Wayne Boston
(Wayne Boston, Attorney-in-fact)
Date: March 22, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated. The signature of each of the
undersigned shall be deemed to relate only to matters having reference to the
above-named company and any subsidiaries thereof.
Elmer B. Harris
President, Chief Executive Officer and Director
(Principal Executive Officer)
William B. Hutchins, III
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
David L. Whitson
Vice President and Comptroller
(Principal Accounting Officer)
Directors:
Whit Armstrong William V. Muse
Philip E. Austin John T. Porter
Margaret A. Carpenter Gerald H. Powell
A. W. Dahlberg Robert D. Powers
Peter V. Gregerson, Sr. John W. Rouse
Bill M. Guthrie James H. Sanford
Carl E. Jones, Jr. John Cox Webb, IV
Wallace D. Malone, Jr. John W. Woods
By: /s/Wayne Boston
(Wayne Boston, Attorney-in-fact)
Date: March 22, 1996
IV-2
<PAGE>
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized. The signature of the
undersigned company shall be deemed to relate only to matters having reference
to such company and any subsidiaries thereof.
GEORGIA POWER COMPANY
By: H. Allen Franklin, President and
Chief Executive Officer
By: /s/Wayne Boston
(Wayne Boston, Attorney-in-fact)
Date: March 22, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated. The signature of each of the
undersigned shall be deemed to relate only to matters having reference to the
above-named company and any subsidiaries thereof.
H. Allen Franklin
President, Chief Executive Officer and Director
(Principal Executive Officer)
Warren Y. Jobe
Executive Vice President, Treasurer,
Chief Financial Officer and Director
(Principal Financial Officer)
Cliff S. Thrasher
Vice President, Comptroller and Chief Accounting Officer
(Principal Accounting Officer)
Directors:
Bennett A. Brown G. Joseph Prendergast
A. W. Dahlberg Herman J. Russell
William A. Fickling, Jr. Gloria M. Shatto
L. G. Hardman III William Jerry Vereen
James R. Lientz, Jr. Thomas R. Williams
By: /s/Wayne Boston
(Wayne Boston, Attorney-in-fact)
Date: March 22, 1996
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized. The signature of the
undersigned company shall be deemed to relate only to matters having reference
to such company and any subsidiaries thereof.
GULF POWER COMPANY
By: Travis J. Bowden, President and
Chief Executive Officer
By: /s/Wayne Boston
(Wayne Boston, Attorney-in-fact)
Date: March 22, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated. The signature of each of the
undersigned shall be deemed to relate only to matters having reference to the
above-named company and any subsidiaries thereof.
Travis J. Bowden
President, Chief Executive Officer and Director
(Principal Executive Officer)
A. E. Scarbrough
Vice President - Finance
(Principal Financial and Accounting Officer)
Directors:
Reed Bell, Sr., M.D. W. D. Hull, Jr.
Paul J. DeNicola C. W. Ruckel
Fred C. Donovan J. K. Tannehill
By: /S/Wayne Boston
(Wayne Boston, Attorney-in-fact)
Date: March 22, 1996
IV-3
<PAGE>
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized. The signature of the
undersigned company shall be deemed to relate only to matters having reference
to such company and any subsidiaries thereof.
MISSISSIPPI POWER COMPANY
By: Dwight H. Evans, President and
Chief Executive Officer
By: /s/Wayne Boston
(Wayne Boston, Attorney-in-fact)
Date: March 22, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated. The signature of each of the
undersigned shall be deemed to relate only to matters having reference to the
above-named company and any subsidiaries thereof.
Dwight H. Evans
President, Chief Executive Officer and Director
(Principal Executive Officer)
Michael W. Southern
Vice President, Secretary, Treasurer and
Chief Financial Officer
(Principal Financial and Accounting Officer)
Directors:
Paul J. DeNicola Aubrey K. Lucas
Edwin E. Downer George A. Schloegel
Robert S. Gaddis Philip J. Terrell
Walter H. Hurt, III N. Eugene Warr
By: /s/Wayne Boston
(Wayne Boston, Attorney-in-fact)
Date: March 22, 1996
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized. The signature of the
undersigned company shall be deemed to relate only to matters having reference
to such company and any subsidiaries thereof.
SAVANNAH ELECTRIC AND POWER COMPANY
By: Arthur M. Gignilliat, Jr., President and
Chief Executive Officer
By: /s/Wayne Boston
(Wayne Boston, Attorney-in-fact)
Date: March 22, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated. The signature of each of the
undersigned shall be deemed to relate only to matters having reference to the
above-named company and any subsidiaries thereof.
Arthur M. Gignilliat, Jr.
President, Chief Executive Officer and Director
(Principal Executive Officer)
Kirby R. Willis
Vice President, Treasurer and
Chief Financial Officer
(Principal Financial and Accounting Officer)
Directors:
Helen Q. Artley Robert B. Miller, III
Paul J. DeNicola Arnold M. Tenenbaum
Brian R. Foster Frederick F. Williams, Jr.
Walter D. Gnann
By: /s/Wayne Boston
(Wayne Boston, Attorney-in-fact)
Date: March 22, 1996
IV-4
<PAGE>
Exhibit 21. Subsidiaries of the Registrants.*
Jurisdiction of
Name of Company Organization
------------------------------------------------ ---------------------
Alabama Power Company Alabama
Alabama Power Capital Trust I Delaware
Alabama Property Company Alabama
Southern Electric Generating Company Alabama
Georgia Power Company Georgia
Piedmont-Forrest Corporation Georgia
Georgia Power L.P. Holdings Corp. Georgia
Georgia Power Capital, L.P. Delaware
Southern Electric Generating Company Alabama
Gulf Power Company Maine
Mississippi Power Company Mississippi
Savannah Electric and Power Company Georgia
SEI Holdings, Inc. Delaware
------------------------------------------------ ---------------------
*This list omits certain subsidiaries pursuant to paragraph (b)(21)(ii) of
Regulation S-K Item 601.
IV-5
<PAGE>
ARTHUR ANDERSEN LLP
Exhibit 23(a)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
of our reports dated February 21, 1996 on the financial statements of The
Southern Company and its subsidiaries and the related financial statement
schedules, included in this Form 10-K, into The Southern Company's previously
filed Registration Statement File Nos. 2-78617, 33-3546, 33-23152, 33-30171,
33-51433, 33-54415, 33-57951, 33-58371, and 33-60427.
/s/Arthur Andersen LLP
Atlanta, Georgia
March 20, 1996
IV-6
<PAGE>
ARTHUR ANDERSEN LLP
Exhibit 23(b)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
of our reports dated February 21, 1996 on the financial statements of Alabama
Power Company and the related financial statement schedules, included in this
Form 10-K, into Alabama Power Company's previously filed Registration Statement
File Nos. 33-49653 and 33-61845.
/s/Arthur Andersen LLP
Birmingham, Alabama
March 20, 1996
IV-7
<PAGE>
ARTHUR ANDERSEN LLP
Exhibit 23(c)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
of our reports dated February 21, 1996 on the financial statements of Georgia
Power Company and the related financial statement schedules, included in this
Form 10-K, into Georgia Power Company's previously filed Registration Statement
File Nos. 33-49661 and 33-60345.
/s/Arthur Andersen LLP
Atlanta, Georgia
March 20, 1996
IV-8
<PAGE>
ARTHUR ANDERSEN LLP
Exhibit 23(d)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
of our reports dated February 21, 1996 on the financial statements of Gulf Power
Company and the related financial statement schedules, included in this Form
10-K, into Gulf Power Company's previously filed Registration Statement File No.
33-50165.
/s/Arthur Andersen LLP
Atlanta, Georgia
March 20, 1996
IV-9
<PAGE>
ARTHUR ANDERSEN LLP
Exhibit 23(e)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
of our reports dated February 21, 1996 on the financial statements of
Mississippi Power Company and the related financial statement schedules,
included in this Form 10-K, into Mississippi Power Company's previously filed
Registration Statement File Nos. 33-49320 and 33-49649.
/s/Arthur Andersen LLP
Atlanta, Georgia
March 20, 1996
IV-10
<PAGE>
ARTHUR ANDERSEN LLP
Exhibit 23(f)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
of our reports dated February 21, 1996 on the financial statements of Savannah
Electric and Power Company and the related financial statement schedules,
included in this Form 10-K, into Savannah Electric and Power Company's
previously filed Registration Statement File No. 33-52509.
/s/Arthur Andersen LLP
Atlanta, Georgia
March 20, 1996
IV-11
<PAGE>
ARTHUR ANDERSEN LLP
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS AS TO SCHEDULES
To The Southern Company:
We have audited in accordance with generally accepted auditing standards,
the consolidated financial statements of The Southern Company and its
subsidiaries included in this Form 10-K, and have issued our report thereon
dated February 21, 1996. Our audits were made for the purpose of forming an
opinion on those statements taken as a whole. The schedule listed under Item
14(a)(2) herein as it relates to The Southern Company and its subsidiaries (page
S-2) is the responsibility of The Southern Company's management and is presented
for purposes of complying with the Securities and Exchange Commission's rules
and is not part of the basic consolidated financial statements. This schedule
has been subjected to the auditing procedures applied in the audits of the basic
consolidated financial statements and, in our opinion, fairly states in all
material respects the financial data required to be set forth therein in
relation to the basic consolidated financial statements taken as a whole.
/s/Arthur Andersen LLP
Atlanta, Georgia
February 21, 1996
IV-12
<PAGE>
ARTHUR ANDERSEN LLP
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS AS TO SCHEDULES
To Alabama Power Company:
We have audited in accordance with generally accepted auditing standards,
the financial statements of Alabama Power Company included in this Form 10-K,
and have issued our report thereon dated February 21, 1996. Our audits were made
for the purpose of forming an opinion on those statements taken as a whole. The
schedule listed under Item 14(a)(2) herein as it relates to Alabama Power
Company (page S-3) is the responsibility of Alabama Power Company's management
and is presented for purposes of complying with the Securities and Exchange
Commission's rules and is not part of the basic financial statements. This
schedule has been subjected to the auditing procedures applied in the audits of
the basic financial statements and, in our opinion, fairly states in all
material respects the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.
/s/Arthur Andersen LLP
Birmingham, Alabama
February 21, 1996
IV-13
<PAGE>
ARTHUR ANDERSEN LLP
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS AS TO SCHEDULES
To Georgia Power Company:
We have audited in accordance with generally accepted auditing standards,
the financial statements of Georgia Power Company included in this Form 10-K,
and have issued our report thereon dated February 21, 1996. Our audits were made
for the purpose of forming an opinion on those statements taken as a whole. The
schedule listed under Item 14(a)(2) herein as it relates to Georgia Power
Company (page S-4) is the responsibility of Georgia Power Company's management
and is presented for purposes of complying with the Securities and Exchange
Commission's rules and is not part of the basic financial statements. This
schedule has been subjected to the auditing procedures applied in the audits of
the basic financial statements and, in our opinion, fairly states in all
material respects the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.
/s/Arthur Andersen LLP
Atlanta, Georgia
February 21, 1996
IV-14
<PAGE>
ARTHUR ANDERSEN LLP
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS AS TO SCHEDULES
To Gulf Power Company:
We have audited in accordance with generally accepted auditing standards,
the financial statements of Gulf Power Company included in this Form 10-K, and
have issued our report thereon dated February 21, 1996. Our audits were made for
the purpose of forming an opinion on those statements taken as a whole. The
schedule listed under Item 14(a)(2) herein as it relates to Gulf Power Company
(page S-5) is the responsibility of Gulf Power Company's management and is
presented for purposes of complying with the Securities and Exchange
Commission's rules and is not part of the basic financial statements. This
schedule has been subjected to the auditing procedures applied in the audits of
the basic financial statements and, in our opinion, fairly states in all
material respects the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.
/s/Arthur Andersen LLP
Atlanta, Georgia
February 21, 1996
IV-15
<PAGE>
ARTHUR ANDERSEN LLP
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS AS TO SCHEDULES
To Mississippi Power Company:
We have audited in accordance with generally accepted auditing standards,
the financial statements of Mississippi Power Company included in this Form
10-K, and have issued our report thereon dated February 21, 1996. Our audits
were made for the purpose of forming an opinion on those statements taken as a
whole. The schedule listed under Item 14(a)(2) herein as it relates to
Mississippi Power Company (page S-6) is the responsibility of Mississippi Power
Company's management and is presented for purposes of complying with the
Securities and Exchange Commission's rules and is not part of the basic
financial statements. This schedule has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, fairly states in all material respects the financial data required to
be set forth therein in relation to the basic financial statements taken as a
whole.
/s/Arthur Andersen LLP
Atlanta, Georgia
February 21, 1996
IV-16
<PAGE>
ARTHUR ANDERSEN LLP
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS AS TO SCHEDULES
To Savannah Electric and Power Company:
We have audited in accordance with generally accepted auditing standards,
the financial statements of Savannah Electric and Power Company included in this
Form 10-K, and have issued our report thereon dated February 21, 1996. Our
audits were made for the purpose of forming an opinion on those statements taken
as a whole. The schedule listed under Item 14(a)(2) herein as it relates to
Savannah Electric and Power Company (page S-7) is the responsibility of Savannah
Electric and Power Company's management and is presented for purposes of
complying with the Securities and Exchange Commission's rules and is not part of
the basic financial statements. This schedule has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, fairly states in all material respects the financial data required to
be set forth therein in relation to the basic financial statements taken as a
whole.
/s/Arthur Andersen LLP
Atlanta, Georgia
February 21, 1996
IV-17
<PAGE>
INDEX TO FINANCIAL STATEMENT SCHEDULES
Schedule Page
II Valuation and Qualifying Accounts and Reserves
1995, 1994 and 1993
The Southern Company and Subsidiary Companies............ S-2
Alabama Power Company.................................... S-3
Georgia Power Company.................................... S-4
Gulf Power Company....................................... S-5
Mississippi Power Company................................ S-6
Savannah Electric and Power Company...................... S-7
Schedules I through V not listed above are omitted as not applicable or not
required. Columns omitted from schedules filed have been omitted because the
information is not applicable or not required.
S-1
<PAGE>
THE SOUTHERN COMPANY AND SUBSIDIARY COMPANIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(Stated in Thousands of Dollars)
<TABLE>
<CAPTION>
Additions
----------------------------------
Balance at Beginning Charged to Charged to Other Balance at End
Description of Period Income Accounts Deductions of Period
----------------------------------- ------------------------ -------------- ------------------- --------------- ----------------
<S> <C> <C> <C> <C> <C>
Provision for uncollectible
accounts
1995.......................... $9,129 $30,445 $23,053 (1) $25,508 (2) $37,119
1994.......................... 9,067 23,322 8 23,268 (2) 9,129
1993.......................... 7,255 24,040 2 22,230 (2) 9,067
- - -------------------
Notes:
(1) Includes the addition of a Purchased Reserve in the amount of $23,027
related to the acquisition of SWEB.
(2) Represents write-off of accounts considered to be uncollectible,
less recoveries of amounts previously written off.
</TABLE>
S-2
<PAGE>
ALABAMA POWER COMPANY
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(Stated in Thousands of Dollars)
<TABLE>
<CAPTION>
Additions
----------------------------------
Balance at Beginning Charged to Charged to Other Balance at End
Description of Period Income Accounts Deductions of Period
---------------------------------- -------------------------- --------------- ------------------ ----------------- ---------------
<S> <C> <C> <C> <C> <C>
Provision for uncollectible
accounts
1995.......................... $2,297 $5,823 - $6,908 (Note) $1,212
1994.......................... 2,632 4,967 - 5,302 (Note) 2,297
1993.......................... 1,482 7,157 - 6,007 (Note) 2,632
- - -------------------
Note: Represents write-off of accounts considered to be uncollectible, less
recoveries of amounts previously written off.
</TABLE>
S-3
<PAGE>
GEORGIA POWER COMPANY
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(Stated in Thousands of Dollars)
<TABLE>
<CAPTION>
Additions
---------------------------------
Balance at Beginning Charged to Charged to Other Balance at End
Description of Period Income Accounts Deductions of Period
- - --------------------------------- ----------------------- -------------- ------------------ ----------------- ----------------
<S> <C> <C> <C> <C> <C>
Provision for uncollectible
accounts
1995.......................... $4,500 $15,875 - $15,375 (Note) $5,000
1994.......................... 4,300 15,424 - 15,224 (Note) 4,500
1993.......................... 4,121 14,310 - 14,131 (Note) 4,300
- - -------------------
Note: Represents write-off of accounts considered to be uncollectible,
less recoveries of amounts previously written off.
</TABLE>
S-4
<PAGE>
GULF POWER COMPANY
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(Stated in Thousands of Dollars)
<TABLE>
<CAPTION>
Additions
----------------------------------
Balance at Beginning Charged to Charged to Other Balance at End
Description of Period Income Accounts Deductions of Period
- - ---------------------------------- ------------------------ --------------- ------------------ ---------------- ---------------
<S> <C> <C> <C> <C> <C>
Provision for uncollectible
accounts
1995.......................... $600 $1,612 $3 $1,447 (Note) $768
1994.......................... 447 1,195 9 1,051 (Note) 600
1993.......................... 356 875 - 784 (Note) 447
- - -------------------
Note: Represents write-off of accounts considered to be uncollectible, less
recoveries of amounts previously written off.
</TABLE>
S-5
<PAGE>
MISSISSIPPI POWER COMPANY
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(Stated in Thousands of Dollars)
<TABLE>
<CAPTION>
Additions
---------------------------------
Balance at Beginning Charged to Charged to Other Balance at End
Description of Period Income Accounts Deductions of Period
- - ---------------------------------- ------------------------- -------------- ------------------ ---------------- ---------------
<S> <C> <C> <C> <C> <C>
Provision for uncollectible
accounts
1995.......................... $670 $1,602 $23 $1,493 (Note) $802
1994.......................... 737 1,234 (1) 1,300 (Note) 670
1993.......................... 508 1,326 2 1,099 (Note) 737
- - -------------------
Note: Represents write-off of accounts considered to be uncollectible, less
recoveries of amounts previously written off.
</TABLE>
S-6
<PAGE>
SAVANNAH ELECTRIC AND POWER COMPANY
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(Stated in Thousands of Dollars)
<TABLE>
<CAPTION>
Additions
-------------------------------
Balance at Beginning Charged to Charged to Other Balance at End
Description of Period Income Accounts Deductions of Period
- - ------------------------------------ ---------------------- ------------ ------------------ --------------- -----------------
<S> <C> <C> <C> <C> <C>
Provision for uncollectible
accounts
1995.......................... $866 $439 - $322 (Note) $983
1994.......................... 762 419 - 315 (Note) 866
1993.......................... 536 330 - 104 (Note) 762
- - -------------------
Note: Represents write-off of accounts receivable considered to be
uncollectible, less recoveries of amounts previously written off.
</TABLE>
S-7
<PAGE>
EXHIBIT INDEX
The following exhibits indicated by an asterisk preceding the exhibit number
are filed herewith. The balance of the exhibits have heretofore been filed with
the SEC, respectively, as the exhibits and in the file numbers indicated and are
incorporated herein by reference. Reference is made to a duplicate list of
exhibits being filed as a part of this Form 10-K, which list, prepared in
accordance with Item 601 of Regulation S-K of the SEC, immediately precedes the
exhibits being physically filed with this Form 10-K.
(1) Underwriting Agreements
GEORGIA
* (c) - Distribution Agreement dated November 29, 1995 between
GEORGIA and Lehman Brothers Inc.; Donaldson, Lufkin & Jenrette
Securities Corporation; J. P. Morgan Securities Inc.; Salomon
Brothers Inc and Smith Barney Inc. relating to $300,000,000 First
Mortgage Bonds Secured Medium-Term Notes.
(3) Articles of Incorporation and By-Laws
SOUTHERN
(a) 1 - Composite Certificate of Incorporation of SOUTHERN,
reflecting all amendments thereto through January 5, 1994.
(Designated in Registration No. 33-3546 as Exhibit 4(a), in
Certificate of Notification, File No. 70-7341, as Exhibit A
and in Certificate of Notification, File No. 70-8181, as
Exhibit A.)
(a) 2 - By-laws of SOUTHERN as amended effective October
21, 1991, and as presently in effect. (Designated in
Form U-1, File No. 70-8181, as Exhibit A-2.)
ALABAMA
(b) 1 - Charter of ALABAMA and amendments thereto through
October 14, 1994. (Designated in Registration Nos.
2-59634 as Exhibit 2(b), 2-60209 as Exhibit 2(c),
2-60484 as Exhibit 2(b), 2-70838 as Exhibit 4(a)-2,
2-85987 as Exhibit 4(a)-2, 33-25539 as Exhibit 4(a)-2,
33-43917 as Exhibit 4(a)-2, in Form 8-K dated February
5, 1992, File No. 1-3164, as Exhibit 4(b)-3, in Form
8-K dated July 8, 1992, File No. 1-3164, as Exhibit
4(b)-3, in Form 8-K dated October 27, 1993, File No.
1-3164, as Exhibits 4(a) and 4(b), in Form 8-K dated
November 16, 1993, File No. 1-3164, as Exhibit 4(a) and
in Certificate of Notification, File No. 70-8191, as
Exhibit A.)
(b) 2 - By-laws of ALABAMA as amended effective July 23,
1993, and as presently in effect. (Designated in Form
U-1, File No. 70-8191, as Exhibit A-2.)
GEORGIA
(c) 1 - Charter of GEORGIA and amendments thereto through
October 25, 1993. (Designated in Registration Nos.
2-63392 as Exhibit 2(a)-2, 2-78913 as Exhibits 4(a)-(2)
and 4(a)-(3), 2-93039 as Exhibit 4(a)-(2), 2-96810 as
Exhibit 4(a)-2, 33-141
<PAGE>
as Exhibit 4(a)-(2), 33-1359 as Exhibit 4(a)(2),
33-5405 as Exhibit 4(b)(2), 33-14367 as Exhibits
4(b)-(2) and 4(b)-(3), 33-22504 as Exhibits 4(b)-(2),
4(b)-(3) and 4(b)-(4), in GEORGIA's Form 10-K for the
year ended December 31, 1991, File No. 1-6468, as
Exhibits 4(a)(2) and 4(a)(3), in Registration No.
33-48895 as Exhibits 4(b)-(2) and 4(b)-(3), in Form 8-K
dated December 10, 1992, File No. 1-6468 as Exhibit
4(b), in Form 8-K dated June 17, 1993, File No. 1-6468,
as Exhibit 4(b) and in Form 8-K dated October 20, 1993,
File No.
1-6468, as Exhibit 4(b).)
(c) 2 - By-laws of GEORGIA as amended effective July 18,
1990, and as presently in effect. (Designated in
GEORGIA's Form 10-K for the year ended December 31,
1990, File No. 1-6468, as Exhibit 3.)
GULF
(d) 1 - Restated Articles of Incorporation of GULF and
amendments thereto through November 8, 1993.
(Designated in Registration No. 33-43739 as Exhibit
4(b)-1, in Form 8-K dated January 15, 1992, File No.
0-2429, as Exhibit 1(b), in Form 8-K dated August 18,
1992, File No. 0-2429, as Exhibit 4(b)-2, in Form 8-K
dated September 22, 1993, File No. 0-2429, as Exhibit 4
and in Form 8-K dated November 3, 1993, File No.
0-2429, as Exhibit 4.)
(d) 2 - By-laws of GULF as amended effective February 25,
1994, and as presently in effect. (Designated in GULF's
Form 10-K for the year ended December 31, 1993, as
Exhibit 3(d)2.)
MISSISSIPPI
(e) 1 - Articles of incorporation of MISSISSIPPI, articles
of merger of Mississippi Power Company (a Maine
corporation) into MISSISSIPPI and articles of amendment
to the articles of incorporation of MISSISSIPPI through
August 19, 1993. (Designated in Registration No.
2-71540 as Exhibit 4(a)-1, in Form U5S for 1987, File
No. 30-222-2, as Exhibit B-10, in Registration No.
33-49320 as Exhibit 4(b)-(1), in Form 8-K dated August
5, 1992, File No. 0-6849, as Exhibits 4(b)-2 and
4(b)-3, in Form 8-K dated August 4, 1993, File No.
0-6849, as Exhibit 4(b)-3 and in Form 8-K dated August
18, 1993, File No. 0-6849, as Exhibit 4(b)-3.)
(e) 2 - By-laws of MISSISSIPPI as amended effective August
22, 1989, and as presently in effect. (Designated in
MISSISSIPPI's Form 10-K for the year ended December 31,
1989, as Exhibit 3(b).)
SAVANNAH
(f) 1 - Charter of SAVANNAH and amendments thereto through
November 10, 1993. (Designated in Registration Nos.
33-25183 as Exhibit 4(b)-(1), 33-45757 as Exhibit
4(b)-(2) and in Form 8-K dated November 9, 1993, File
No. 1-5072, as Exhibit 4(b).)
(f) 2 - By-laws of SAVANNAH as amended effective February
16, 1994, and as presently in effect. (Designated in
SAVANNAH's Form 10-K for the year ended December 31,
1993, as Exhibit 3(f)2.)
<PAGE>
(4) Instruments Describing Rights of Security Holders, Including Indentures
ALABAMA
(b) - Indenture dated as of January 1, 1942, between
ALABAMA and Chemical Bank, as Trustee, and indentures
supplemental thereto through that dated as of December
1, 1994. (Designated in Registration Nos. 2-59843 as
Exhibit 2(a)-2, 2-60484 as Exhibits 2(a)-3 and 2(a)-4,
2-60716 as Exhibit 2(c), 2-67574 as Exhibit 2(c),
2-68687 as Exhibit 2(c), 2-69599 as Exhibit 4(a)-2,
2-71364 as Exhibit 4(a)-2, 2-73727 as Exhibit 4(a)-2,
33-5079 as Exhibit 4(a)-2, 33-17083 as Exhibit 4(a)-2,
33-22090 as Exhibit 4(a)-2, in ALABAMA's Form 10-K for
the year ended December 31, 1990, File No. 1-3164, as
Exhibit 4(c), in Registration Nos. 33-43917 as Exhibit
4(a)-2, 33-45492 as Exhibit 4(a)-2, 33-48885 as Exhibit
4(a)-2, 33-48917 as Exhibit 4(a)-2, in Form 8-K dated
January 20, 1993, File No. 1-3436, as Exhibit 4(a)-3,
in Form 8-K dated February 17, 1993, File No. 1-3436,
as Exhibit 4(a)-3, in Form 8-K dated March 10, 1993,
File No. 1-3436, as Exhibit 4(a)-3, in Certificate of
Notification, File No. 70-8069, as Exhibits A and B, in
Form 8-K dated June 24, 1993, File No. 1-3436, as
Exhibit 4, in Certificate of Notification, File No.
70-8069, as Exhibit A, in Form 8-K dated November 16,
1993, File No. 1-3436, as Exhibit 4(b), in Certificate
of Notification, File No. 70-8069, as Exhibits A and B,
in Certificate of Notification, File No. 70-8069, as
Exhibit A, in Certificate of Notification, File No.
70-8069, as Exhibit A and in Form 8-K dated November
30, 1994, File No. 1-3436, as Exhibit 4.)
GEORGIA
(c) 1 - Indenture dated as of March 1, 1941, between
GEORGIA and Chemical Bank, as Trustee, and indentures
supplemental thereto dated as of March 1, 1941, March
3, 1941 (3 indentures), March 6, 1941 (139 indentures),
March 1, 1946 (88 indentures) and December 1, 1947,
through May 1, 1995. (Designated in Registration Nos.
2-4663 as Exhibits B-3 and B-3(a), 2-7299 as Exhibit
7(a)-2, 2-61116 as Exhibit 2(a)-3 and 2(a)-4, 2-62488
as Exhibit 2(a)-3, 2-63393 as Exhibit 2(a)-4, 2-63705
as Exhibit 2(a)-3, 2-68973 as Exhibit 2(a)-3, 2-70679
as Exhibit 4(a)-(2), 2-72324 as Exhibit 4(a)-2, 2-73987
as Exhibit 4(a)-(2), 2-77941 as Exhibits 4(a)-(2) and
4(a)-(3), 2-79336 as Exhibit 4(a)-(2), 2-81303 as
Exhibit 4(a)-(2), 2-90105 as Exhibit 4(a)-(2), 33-5405
as Exhibit 4(a)-(2), 33-14367 as Exhibits 4(a)-(2) and
4(a)-(3), 33-22504 as Exhibits 4(a)-(2), 4(a)-(3) and
4(a)-(4), 33-32420 as Exhibit 4(a)-(2), 33-35683 as
Exhibit 4(a)-(2), in GEORGIA's Form 10-K for the year
ended December 31, 1990, File No. 1-6468, as Exhibit
4(a)(3), in Form 10-K for the year ended December 31,
1991, File No. 1-6468, as Exhibit 4(a)(5), in
Registration No. 33-48895 as Exhibit 4(a)-(2), in Form
8-K dated August 26, 1992, File No. 1-6468, as Exhibit
4(a)-(3), in Form 8-K dated September 9, 1992, File No.
1-6468, as Exhibits 4(a)-(3) and 4(a)-(4), in Form 8-K
dated September 23, 1992, File No. 1-6468, as Exhibit
4(a)-(3), in Form 8-A dated October 12, 1992, as
Exhibit 2(b), in Form 8-K dated January 27, 1993, File
No. 1-6468, as Exhibit 4(a)-(3), in Registration No.
33-49661 as Exhibit 4(a)-(2), in Form 8-K dated July
26, 1993, File No. 1-6468, as Exhibit 4, in Certificate
of Notification, File No. 70-7832, as Exhibit M, in
<PAGE>
Certificate of Notification, File No. 70-7832, as
Exhibit C, in Certificate of Notification, File No.
70-7832, as Exhibits K and L, in Certificate of
Notification, File No. 70-8443, as Exhibit C, in
Certificate of Notification, File No. 70-8443, as
Exhibit C, in Certificate of Notification, File No.
70-8443, as Exhibit E, in Certificate of Notification,
File No. 70-8443, as Exhibit E, in Certificate of
Notification, File No. 70-8443, as Exhibit E, in
GEORGIA's Form 10-K for the year ended December 31,
1994, File No. 1-6468, as Exhibits 4(c)2 and 4(c)3, in
Certificate of Notification, File No. 70-8443, as
Exhibit C, in Certificate of Notification, File No.
70-8443, as Exhibit C and in Form 8-K dated May 17,
1995, File No. 1-6468, as Exhibit 4.)
* (c) 2 - Supplemental Indenture dated as of July 1,
1995, between GEORGIA and Chemical Bank, as Trustee.
* (c) 3 - Second Supplemental Indenture dated as of July
1, 1995, between GEORGIA and Chemical Bank, as Trustee.
* (c) 4 - Supplemental Indenture dated as of September 1,
1995, between GEORGIA and Chemical Bank, as Trustee.
* (c) 5 - Second Supplemental Indenture dated as of
September 1, 1995, between GEORGIA and Chemical Bank,
as Trustee.
* (c) 6 - Supplemental Indenture dated as of October 15,
1995, between GEORGIA and Chemical Bank, as Trustee.
(c) 7 - Indenture dated as of December 1, 1994, between
GEORGIA and Trust Company Bank, as Trustee and
indentures supplemental thereto through that dated as
of December 15, 1994. (Designated in Certificate of
Notification, File No. 70-8461, as Exhibits E and F.)
GULF
(d) - Indenture dated as of September 1, 1941, between GULF
and The Chase Manhattan Bank (National Association), as
Trustee, and indentures supplemental thereto through
February 1, 1996. (Designated in Registration Nos.
2-4833 as Exhibit B-3, 2-62319 as Exhibit 2(a)-3,
2-63765 as Exhibit 2(a)-3, 2-66260 as Exhibit 2(a)-3,
33-2809 as Exhibit 4(a)-2, 33-43739 as Exhibit 4(a)-2,
in GULF's Form 10-K for the year ended December 31,
1991, File No. 0-2429, as Exhibit 4(b), in Form 8-K
dated August 18, 1992, File No. 0-2429, as Exhibit
4(a)-3, in Registration No. 33-50165 as Exhibit 4(a)-2,
in Form 8-K dated July 12, 1993, File No. 0-2429, as
Exhibit 4, in Certificate of Notification, File No.
70-8229, as Exhibit A, in Certificate of Notification,
File No. 70-8229, as Exhibits E and F, in Form 8-K
dated January 17, 1996, File No. 0-2429, as Exhibit 4
and in Certificate of Notification, File No. 70-8229,
as Exhibit A.)
MISSISSIPPI
(e) - Indenture dated as of September 1, 1941, between
MISSISSIPPI and Bankers Trust Company, as Successor
Trustee, and indentures supplemental thereto through
December 1, 1995. (Designated in Registration Nos.
2-4834 as Exhibit B-3, 2-62965 as Exhibit 2(b)-2,
2-66845 as Exhibit 2(b)-2, 2-71537 as Exhibit 4(a)-(2),
<PAGE>
33-5414 as Exhibit 4(a)-(2), 33-39833 as Exhibit
4(a)-2, in MISSISSIPPI's Form 10-K for the year ended
December 31, 1991, File No. 0-6849, as Exhibit 4(b), in Form
8-K dated August 5, 1992, File No. 0-6849, as Exhibit
4(a)-2, in Second Certificate of Notification, File No.
70-7941, as Exhibit I, in MISSISSIPPI's Form 8-K dated
February 26, 1993, File No. 0-6849, as Exhibit 4(a)-2, in
Certificate of Notification, File No. 70-8127, as Exhibit A,
in Form 8-K dated June 22, 1993, File No. 0-6849, as Exhibit
1, in Certificate of Notification, File No. 70-8127, as
Exhibit A, in Form 8-K dated March 8, 1994, File No. 0-6849,
as Exhibit 4, in Certificate of Notification, File No.
70-8127, as Exhibit C and in Form 8-K dated December 5,
1995, File No. 0-6849, as Exhibit 4.)
SAVANNAH
(f) - Indenture dated as of March 1, 1945, between SAVANNAH and
Bank of New York, New York, as Trustee, and indentures
supplemental thereto through May 1, 1995. (Designated in
Registration Nos. 33-25183 as Exhibit 4(a)-(1), 33-41496 as
Exhibit 4(a)-(2), 33-45757 as Exhibit 4(a)-(2), in
SAVANNAH's Form 10-K for the year ended December 31, 1991,
File No. 1-5072, as Exhibit 4(b), in Form 8-K dated July 8,
1992, File No. 1-5072, as Exhibit 4(a)-3, in Registration
No. 33-50587 as Exhibit 4(a)-(2), in Form 8-K dated July 22,
1993, File No. 1-5072, as Exhibit 4 and in Form 8-K dated
May 18, 1995, File No. 1-5072, as Exhibit 4.)
(10) Material Contracts
SOUTHERN
(a) 1 - Service contracts dated as of January 1, 1984 and
Amendment No. 1 dated as of September 6, 1985, between SCS
and ALABAMA, GEORGIA, GULF, MISSISSIPPI, SEGCO and SOUTHERN.
(Designated in SOUTHERN's Form 10-K for the year ended
December 31, 1984, File No. 1-3526, as Exhibit 10(a) and in
SOUTHERN's Form 10-K for the year ended December 31, 1985,
File No. 1-3526, as Exhibit 10(a)(3).)
(a) 2 - Service contract dated as of July 17, 1981, between SCS
and SEI. (Designated in SOUTHERN's Form 10-K for the year
ended December 31, 1985, File No. 1-3526, as Exhibit
10(a)(2).)
(a) 3 - Service contract dated as of March 3, 1988, between SCS
and SAVANNAH. (Designated in SAVANNAH's Form 10-K for the
year ended December 31, 1987, File No. 1-5072, as Exhibit
10-p.)
(a) 4 - Service contract dated as of January 15, 1991, between
SCS and Southern Nuclear. (Designated in SOUTHERN's Form
10-K for the year ended December 31, 1991, File No. 1-3526,
as Exhibit 10(a)(4).)
(a) 5 - Service Contract dated as of December 12, 1994, between
SCS and Mobile Energy Services Company, Inc. (Designated in
SOUTHERN's Form 10-K for the year ended December 31, 1994,
File No. 1-3526, as Exhibit 10(a)58.)
<PAGE>
(a) 6 - Interchange contract dated October 28, 1988, effective
January 1, 1989, between ALABAMA, GEORGIA, GULF,
MISSISSIPPI, SAVANNAH and SCS. (Designated in SAVANNAH's
Form 10-K for the year ended December 31, 1988, File No.
1-5072, as Exhibit 10(b).)
(a) 7 - Agreement dated as of January 27, 1959, Amendment No. 1
dated as of October 27, 1982 and Amendment No. 2 dated
November 4, 1993 and effective June 1, 1994, among SEGCO,
ALABAMA and GEORGIA. (Designated in Registration No. 2-59634
as Exhibit 5(c), in GEORGIA's Form 10-K for the year ended
December 31, 1982, File No. 1-6468, as Exhibit 10(d)(2) and
in ALABAMA's Form 10-K for the year ended December 31, 1994,
File No. 1-3164, as Exhibit 10(b)18.)
(a) 8 - Joint Committee Agreement dated as of August 27, 1976,
among GEORGIA, OPC, MEAG and Dalton. (Designated in
Registration No. 2-61116 as Exhibit 5(d).)
(a) 9 - Edwin I. Hatch Nuclear Plant Purchase and Ownership
Participation Agreement dated as of January 6, 1975, between
GEORGIA and OPC. (Designated in Form 8-K for January, 1975,
File No. 1-6468, as Exhibit (b)(1).)
(a) 10 - Edwin I. Hatch Nuclear Plant Operating Agreement dated
as of January 6, 1975, between GEORGIA and OPC. (Designated
in Form 8-K for January, 1975, File No. 1-6468, as Exhibit
(b)(3).)
(a) 11 - Revised and Restated Integrated Transmission System
Agreement dated as of November 12, 1990, between GEORGIA and
OPC. (Designated in GEORGIA's Form 10-K for the year ended
December 31, 1990, File No. 1-6468, as Exhibit 10(g).)
(a) 12 - Plant Hal Wansley Purchase and Ownership Participation
Agreement dated as of March 26, 1976, between GEORGIA and
OPC. (Designated in Certificate of Notification, File No.
70-5592, as Exhibit A.)
(a) 13 - Plant Hal Wansley Operating Agreement dated as of March
26, 1976, between GEORGIA and OPC. (Designated in
Certificate of Notification, File No. 70-5592, as Exhibit
B.)
(a) 14 - Edwin I. Hatch Nuclear Plant Purchase and Ownership
Participation Agreement dated as of August 27, 1976, between
GEORGIA, MEAG and Dalton. (Designated in Form 8-K dated as
of June 13, 1977, File No. 1-6468, as Exhibit (b)(1).)
(a) 15 - Edwin I. Hatch Nuclear Plant Operating Agreement dated
as of August 27, 1976, between GEORGIA, MEAG and Dalton.
(Designated in Form 8-K for February 1977, File No. 1-6468,
as Exhibit (b)(2).)
<PAGE>
(a) 16 - Alvin W. Vogtle Nuclear Units Number One and Two
Purchase and Ownership Participation Agreement dated as of
August 27, 1976 and Amendment No. 1 dated as of January 18,
1977, among GEORGIA, OPC, MEAG and Dalton. (Designated in
Form U-1, File No. 70-5792, as Exhibit B-1 and in Form 8-K
for January 1977, File No. 1-6468, as Exhibit (B)(3).)
(a) 17 - Alvin W. Vogtle Nuclear Units Number One and Two
Operating Agreement dated as of August 27, 1976, among
GEORGIA, OPC, MEAG and Dalton. (Designated in Form U-1, File
No. 70-5792, as Exhibit B-2.)
(a) 18 - Alvin W. Vogtle Nuclear Units Number One and Two
Purchase, Amendment, Assignment and Assumption Agreement
dated as of November 16, 1983, between GEORGIA and MEAG.
(Designated in GEORGIA's Form 10-K for the year ended
December 31, 1983, File No. 1-6468, as Exhibit 10(k)(4).)
(a) 19 - Plant Hal Wansley Purchase and Ownership Participation
Agreement dated as of August 27, 1976, between GEORGIA and
MEAG. (Designated in Form 8-K dated as of July 5, 1977, File
No. 1-6468, as Exhibit (b)(2).)
(a) 20 - Plant Hal Wansley Operating Agreement dated as of
August 27, 1976, between GEORGIA and MEAG. (Designated in
Form 8-K dated as of July 5, 1977, File No. 1-6468, as
Exhibit (b)(4).)
(a) 21 - Integrated Transmission System Agreement dated as of
August 27, 1976, between GEORGIA and Dalton. (Designated in
Form 8-K dated as of July 5, 1977, File No. 1-6468, as
Exhibit (b)(8).)
(a) 22 - Integrated Transmission System Agreement dated as of
August 27, 1976, between GEORGIA and MEAG. (Designated in
Form 8-K for February 1977, File No. 1-6468, as Exhibit
(b)(4).)
(a) 23 - Plant Hal Wansley Purchase and Ownership Participation
Agreement dated as of April 19, 1977, between GEORGIA and
Dalton. (Designated in Form 8-K dated as of June 13, 1977,
File No. 1-6468, as Exhibit (b)(3).)
(a) 24 - Plant Hal Wansley Operating Agreement dated as of April
19, 1977, between GEORGIA and Dalton. (Designated in Form
8-K dated as of June 13, 1977, File No. 1-6468, as Exhibit
(b)(7).)
(a) 25 - Plant Robert W. Scherer Units Number One and Two
Purchase and Ownership Participation Agreement dated as of
May 15, 1980, Amendment No. 1 dated as of December 30, 1985,
Amendment No. 2 dated as of July 1, 1986, Amendment No. 3
dated as of August 1, 1988 and Amendment No. 4 dated as of
December 31, 1990, among GEORGIA, OPC, MEAG and Dalton.
(Designated in Form U-1, File No. 70-6481, as Exhibit B-3,
in SOUTHERN's Form 10-K for the year ended December 31,
1987, File No. 1-3526, as Exhibit 10(o)(2), in SOUTHERN's
Form 10-K for the year ended December 31, 1989, File No.
1-3526, as Exhibit 10(n)(2) and in SOUTHERN's Form 10-K for
the year ended December 31, 1993, File No. 1-3526, as
Exhibit 10(a)54.)
<PAGE>
(a) 26 - Plant Robert W. Scherer Units Number One and Two
Operating Agreement dated as of May 15, 1980, Amendment No.
1 dated as of December 3, 1985 and Amendment No. 2 dated as
of December 31, 1990, among GEORGIA, OPC, MEAG and Dalton.
(Designated in Form U-1, File No. 70-6481, as Exhibit B-4,
in SOUTHERN's Form 10-K for the year ended December 31,
1987, File No. 1-3526, as Exhibit 10(o)(4) and in SOUTHERN's
Form 10-K for the year ended December 31, 1993, File No.
1-3526, as Exhibit 10(a)55.)
(a) 27 - Plant Robert W. Scherer Purchase, Sale and Option
Agreement dated as of May 15, 1980, between GEORGIA and
MEAG. (Designated in Form U-1, File No. 70-6481, as Exhibit
B-1.)
(a) 28 - Plant Robert W. Scherer Purchase and Sale Agreement
dated as of May 16, 1980, between GEORGIA and Dalton.
(Designated in Form U-1, File No. 70-6481, as Exhibit B-2.)
(a) 29 - Plant Robert W. Scherer Unit Number Three Purchase and
Ownership Participation Agreement dated as of March 1, 1984,
Amendment No. 1 dated as of July 1, 1986 and Amendment No. 2
dated as of August 1, 1988, between GEORGIA and GULF.
(Designated in Form U-1, File No. 70-6573, as Exhibit B-4,
in SOUTHERN's Form 10-K for the year ended December 31,
1987, as Exhibit 10(o)(2) and in SOUTHERN's Form 10-K for
the year ended December 31, 1989, as Exhibit 10(n)(2).)
(a) 30 - Plant Robert W. Scherer Unit Number Three Operating
Agreement dated as of March 1, 1984, between GEORGIA and
GULF. (Designated in Form U-1, File No. 70-6573, as Exhibit
B-5.)
(a) 31 - Plant Robert W. Scherer Unit No. Four Amended and
Restated Purchase and Ownership Participation Agreement by
and among GEORGIA, FP&L and JEA, dated as of December 31,
1990 and Amendment No. 1 dated as of June 15, 1994.
(Designated in Form U-1, File No. 70-7843, as Exhibit B-1
and in SOUTHERN's Form 10-K for the year ended December 31,
1994, File No. 1-3526, as Exhibit 10(a)60.)
(a) 32 - Plant Robert W. Scherer Unit No. Four Operating
Agreement by and among GEORGIA, FP&L and JEA, dated as of
December 31, 1990 and Amendment No. 1 dated as of June 15,
1994. (Designated in Form U-1, File No. 70-7843, as Exhibit
B-2 and in SOUTHERN's Form 10-K for the year ended December
31, 1994, File No. 1-3526, as Exhibit 10(a)61.)
(a) 33 - Amended and Restated Unit Power Sales Agreement dated
February 18, 1982 and Amendment No. 1 dated May 18, 1982,
between FP&L and ALABAMA, GEORGIA, GULF, MISSISSIPPI and
SCS. (Designated in MISSISSIPPI's Form 10-K for the year
ended December 31, 1981, File No. 0-6849, as Exhibit
10(c)(2) and in GEORGIA's Form 10-K for the year ended
December 31, 1982, File No. 1-6468, as Exhibit 10(r)(3).)
<PAGE>
(a) 34 - Amended and Restated Unit Power Sales Agreement dated
May 19, 1982, Amendment No. 1 dated August 30, 1984 and
Amendment No. 2 dated October 30, 1987, between JEA and
ALABAMA, GEORGIA, GULF, MISSISSIPPI and SCS. (Designated in
GEORGIA's Form 10-K for the year ended December 31, 1982,
File No. 1-6468, as Exhibit 10(s)(2), in SOUTHERN's Form
10-K for the year ended December 31, 1984, File No. 1-3526,
as Exhibit 10(r)(2) and in GEORGIA's Form 10-K for the year
ended December 31, 1990, File No. 1-6468, as Exhibit
10(s)(2).)
(a) 35 - Unit Power Sales Agreement dated July 19, 1988, between
FPC and ALABAMA, GEORGIA, GULF, MISSISSIPPI, SAVANNAH and
SCS. (Designated in SAVANNAH's Form 10-K for the year ended
December 31, 1988, File No. 1-5072, as Exhibit 10(d).)
(a) 36 - Amended Unit Power Sales Agreement dated July 20, 1988,
between FP&L and ALABAMA, GEORGIA, GULF, MISSISSIPPI,
SAVANNAH and SCS. (Designated in SAVANNAH's Form 10-K for
the year ended December 31, 1988, File No. 1-5072, as
Exhibit 10(e).)
(a) 37 - Amended Unit Power Sales Agreement dated August 17,
1988, between JEA and ALABAMA, GEORGIA, GULF, MISSISSIPPI,
SAVANNAH and SCS. (Designated in SAVANNAH's Form 10-K for
the year ended December 31, 1988, File No. 1-5072, as
Exhibit 10(f).)
(a) 38 - Unit Power Sales Agreement dated December 8, 1990,
between Tallahassee and ALABAMA, GEORGIA, GULF, MISSISSIPPI,
SAVANNAH and SCS. (Designated in GEORGIA's Form 10-K for the
year ended December 31, 1990, File No. 1-6468, as Exhibit
10(x).)
(a) 39 - Transition Energy Agreement dated December 31, 1990,
between JEA and ALABAMA, GEORGIA, GULF, MISSISSIPPI,
SAVANNAH and SCS. (Designated in GULF's Form 10-K for the
year ended December 31, 1991, File No. 0-2429, as Exhibit
10(1).)
(a) 40 - Transition Energy Agreement dated December 31, 1990,
between FP&L and ALABAMA, GEORGIA, GULF, MISSISSIPPI,
SAVANNAH and SCS. (Designated in GULF's Form 10-K for the
year ended December 31, 1991, File No. 0-2429, as Exhibit
10(m).)
(a) 41 - Rocky Mountain Pumped Storage Hydroelectric Project
Ownership Participation Agreement dated November 18, 1988,
between OPC and GEORGIA. (Designated in GEORGIA's Form 10-K
for the year ended December 31, 1988, File No. 1-6468, as
Exhibit 10(x).)
(a) 42 - Rocky Mountain Pumped Storage Hydroelectric Project
Operating Agreement dated November 18, 1988, between OPC and
GEORGIA. (Designated in GEORGIA's Form 10-K for the year
ended December 31, 1988, File No. 1-6468, as Exhibit 10(y).)
<PAGE>
(a) 43 - Purchase and Ownership Agreement for Joint Ownership
Interest in the James H. Miller, Jr. Steam Electric
Generating Plant Units One and Two dated November 18, 1988,
between ALABAMA and AEC. (Designated in Form U-1, File No.
70-7609, as Exhibit B-1.)
(a) 44 - Operating Agreement for Joint Ownership Interest in the
James H. Miller, Jr. Steam Electric Generating Plant Units
One and Two dated November 18, 1988, between ALABAMA and
AEC. (Designated in Form U-1, File No. 70-7609, as Exhibit
B-2.)
(a) 45 - Transmission Facilities Agreement dated February 25,
1982, Amendment No. 1 dated May 12, 1982 and Amendment No. 2
dated December 6, 1983, between Gulf States and MISSISSIPPI.
(Designated in MISSISSIPPI's Form 10-K for the year ended
December 31, 1981, File No. 0-6849, as Exhibit 10(f), in
MISSISSIPPI's Form 10-K for the year ended December 31,
1982, File No. 0-6849, as Exhibit 10(f)(2) and in
MISSISSIPPI's Form 10-K for the year ended December 31,
1983, File No. 0-6849, as Exhibit 10(f)(3).)
(a) 46 - Form of commitment agreement, Amendment No. 1 and
Amendment No. 2 with respect to SOUTHERN, ALABAMA, GEORGIA
and MISSISSIPPI revolving credits. (Designated in Form U-1,
File No. 70-7738, as Exhibit A-5 and in Form U-1, File No.
70-7937, as A-5(b).)
(a) 47 - Block Power Sale Agreement between GEORGIA and OPC
dated as of November 12, 1990. (Designated in GEORGIA's Form
10-K for the year ended December 31, 1990, File No. 1-6468,
as Exhibit 10(cc).)
(a) 48 - Coordination Services Agreement between GEORGIA and OPC
dated as of November 12, 1990. (Designated in GEORGIA's Form
10-K for the year ended December 31, 1990, File No. 1-6468,
as Exhibit 10(dd).)
(a) 49 - Amended and Restated Nuclear Managing Board Agreement
for Plant Hatch and Plant Vogtle among GEORGIA, OPC, MEAG
and Dalton dated as of July 1, 1993. (Designated in
SOUTHERN's Form 10-K for the year ended December 31, 1993,
File No. 1-3526, as Exhibit 10(a)49.)
(a) 50 - Integrated Transmission System Agreement, Power Sale
and Coordination Umbrella Agreement between GEORGIA and OPC
dated as of November 12, 1990. (Designated in GEORGIA's Form
10-K for the year ended December 31, 1990, File No. 1-6468,
as Exhibit 10(ff).)
(a) 51 - Revised and Restated Integrated Transmission System
Agreement between GEORGIA and Dalton dated as of December 7,
1990. (Designated in GEORGIA's Form 10-K for the year ended
December 31, 1990, File No. 1-6468, as Exhibit 10(gg).)
(a) 52 - Revised and Restated Integrated Transmission System
Agreement between GEORGIA and MEAG dated as of December 7,
1990. (Designated in GEORGIA's Form 10-K for the year ended
December 31, 1990, File No. 1-6468, as Exhibit 10(hh).)
<PAGE>
(a) 53 - Long Term Transmission Service Agreement between
Entergy Power, Inc. and ALABAMA, MISSISSIPPI and SCS.
(Designated in SOUTHERN's Form 10-K for the year ended
December 31, 1992, File No. 1-3526, as Exhibit 10(a)53.)
(a) 54 - Plant Scherer Managing Board Agreement dated as of
December 31, 1990 among GEORGIA, OPC, MEAG, Dalton, GULF,
FP&L and JEA. (Designated in SOUTHERN's Form 10-K for the
year ended December 31, 1993, File No. 1-3526, as Exhibit
10(a)56.)
(a) 55 - Plant McIntosh Combustion Turbine Purchase and
Ownership Participation Agreement between GEORGIA and
SAVANNAH dated as of December 15, 1992. (Designated in
SOUTHERN's Form 10-K for the year ended December 31, 1993,
File No. 1-3526, as Exhibit 10(a)57.)
(a) 56 - Plant McIntosh Combustion Turbine Operating Agreement
between GEORGIA and SAVANNAH dated as of December 15, 1992.
(Designated in SOUTHERN's Form 10-K for the year ended
December 31, 1993, File No. 1-3526, as Exhibit 10(a)58.)
(a) 57 - Power Purchase Agreement dated as of December 3, 1993
between GEORGIA and FPC. (Designated in SOUTHERN's Form 10-K
for the year ended December 31, 1993, File No. 1-3526, as
Exhibit 10(a)59.)
(a) 58 - Operating Agreement for the Joseph M. Farley Nuclear
Plant between ALABAMA and Southern Nuclear dated as of
December 23, 1991. (Designated in Form U-1, File No.
70-7530, as Exhibit B-7.)
(a) 59 - Nuclear Services Agreement between Southern Nuclear and
GEORGIA dated as of October 31, 1991. (Designated in Form
U-1, File No. 70-7530, as Exhibit B-6.)
(a) 60 - Nuclear Managing Board Agreement among GEORGIA, OPC,
MEAG and Dalton dated as of November 12, 1990. (Designated
in GEORGIA's Form 10-K for the year ended December 31, 1990,
File No. 1-6468, as Exhibit 10(ee).)
* (a) 61 - The Southern Company Productivity Improvement Plan,
Amended and Restated effective January 1, 1995.
* (a) 62 - The Southern Company Executive Productivity
Improvement Plan, effective January 1, 1995.
* (a) 63 - The Southern Company Employee Savings Plan, Amended
and Restated effective July 3, 1995 and First Amendment and
Second Amendment thereto.
* (a) 64 - The Southern Company Employee Stock Ownership Plan,
Amended and Restated effective April 1, 1995 and First
Amendment thereto.
(a) 65 - Pension Plan For Employees of ALABAMA, Amended and
Restated effective as of January 1, 1989. (Designated in
SOUTHERN's Form 10-K for the year ended December 31, 1994,
File No. 1-3526, as Exhibit 10(a)69.)
<PAGE>
(a) 66 - Pension Plan For Employees of GEORGIA, Amended and
Restated effective as of January 1, 1989. (Designated in
SOUTHERN's Form 10-K for the year ended December 31, 1994,
File No. 1-3526, as Exhibit 10(a)70.)
(a) 67 - Pension Plan For Employees of SCS, Amended and Restated
effective as of January 1, 1989. (Designated in SOUTHERN's
Form 10-K for the year ended December 31, 1994, File No.
1-3526, as Exhibit 10(a)71.)
* (a) 68 - First Amendment to the Pension Plan for Employees
of SCS, effective as of January 1, 1995.
(a) 69 - The Southern Company Performance Pay Plan, Amended and
Restated effective January 1, 1993. (Designated in
SOUTHERN's Form 10-K for the year ended December 31, 1994,
File No. 1-3526, as Exhibit 10(a)72.)
* (a) 70 - First Amendment and Second Amendment to The
Southern Company Performance Pay Plan.
* (a) 71 - Supplemental Benefit Plan for ALABAMA.
* (a) 72 - Supplemental Benefit Plan for GEORGIA.
* (a) 73 - Supplemental Benefit Plan for SCS and SEI.
(a) 74 - The Deferred Compensation Plan for the Directors of The
Southern Company. (Designated in SOUTHERN's Form 10-K for
the year ended December 31, 1994, File No. 1-3526, as
Exhibit 10(a)76.)
* (a) 75 - First Amendment and Second Amendment to The
Deferred Compensation Plan for the Directors of The Southern
Company.
(a) 76 - The Southern Company Outside Directors Pension Plan.
(Designated in SOUTHERN's Form 10-K for the year ended
December 31, 1994, File No. 1-3526, as Exhibit 10(a)77.)
* (a) 77 - The Southern Company Deferred Compensation Plan.
(a) 78 - The Southern Company Outside Directors Stock Plan.
(Designated in Registration No. 33-54415 as Exhibit 4(c).)
* (a) 79 - First Amendment to The Southern Company Outside
Directors Stock Plan.
* (a) 80 - Outside Directors Stock Plan for Subsidiaries of
The Southern Company and First Amendment thereto.
(a) 81 - The Southern Company Executive Stock Plan for the
Southern Electric System and the First Amendment thereto.
(Designated in Registration No. 33-30171 as Exhibit 4(c).)
<PAGE>
* (a) 82 - Second Amendment to The Southern Company Executive
Stock Plan for the Southern Electric System.
ALABAMA
(b) 1 - Service contracts dated as of January 1, 1984 and
Amendment No. 1 dated as of September 6, 1985, between SCS
and ALABAMA, GEORGIA, GULF, MISSISSIPPI, SEGCO and SOUTHERN.
See Exhibit 10(a)1 herein.
(b) 2 - Interchange contract dated October 28, 1988, effective
January 1, 1989, between ALABAMA, GEORGIA, GULF,
MISSISSIPPI, SAVANNAH and SCS. See Exhibit 10(a)6 herein.
(b) 3 - Agreement dated as of January 27, 1959, Amendment No. 1
dated as of October 27, 1982 and Amendment No. 2 dated
November 4, 1993 and effective June 1, 1994, among SEGCO,
ALABAMA and GEORGIA. See Exhibit 10(a)7 herein.
(b) 4 - Amended and Restated Unit Power Sales Agreement dated
February 18, 1982 and Amendment No. 1 dated May 18, 1982,
between FP&L and ALABAMA, GEORGIA, GULF, MISSISSIPPI and
SCS. See Exhibit 10(a)33 herein.
(b) 5 - Amended and Restated Unit Power Sales Agreement dated
May 19, 1982, Amendment No. 1, dated August 30, 1984 and
Amendment No. 2, dated October 30, 1987, between JEA and
ALABAMA, GEORGIA, GULF, MISSISSIPPI and SCS. See Exhibit
10(a)34 herein.
(b) 6 - Unit Power Sales Agreement dated July 19, 1988, between
FPC and ALABAMA, GEORGIA, GULF, MISSISSIPPI, SAVANNAH and
SCS. See Exhibit 10(a)35 herein.
(b) 7 - Amended Unit Power Sales Agreement dated July 20, 1988,
between FP&L and ALABAMA, GEORGIA, GULF, MISSISSIPPI,
SAVANNAH and SCS. See Exhibit 10(a)36 herein.
(b) 8 - Amended Unit Power Sales Agreement dated August 17,
1988, between JEA and ALABAMA, GEORGIA, GULF, MISSISSIPPI,
SAVANNAH and SCS. See Exhibit 10(a)37 herein.
(b) 9 - Unit Power Sales Agreement dated December 8, 1990,
between Tallahassee and ALABAMA, GEORGIA, GULF, MISSISSIPPI,
SAVANNAH and SCS. See Exhibit 10(a)38 herein.
(b) 10 - Transition Energy Agreement dated December 31, 1990,
between JEA and ALABAMA, GEORGIA, GULF, MISSISSIPPI,
SAVANNAH and SCS. See Exhibit 10(a)39 herein.
(b) 11 - Transition Energy Agreement dated December 31, 1990,
between FP&L and ALABAMA, GEORGIA, GULF, MISSISSIPPI,
SAVANNAH and SCS. See Exhibit 10(a)40 herein.
<PAGE>
(b) 12 - Firm Power Purchase Contract between ALABAMA and AMEA.
(Designated in Certificate of Notification, File No.
70-7212, as Exhibit B.)
(b) 13 - 1991 Firm Power Purchase Contract between ALABAMA and
AMEA. (Designated in Form U-1, File No. 70-7873, as Exhibit
B-1.)
(b) 14 - Purchase and Ownership Agreement for Joint Ownership
Interest in the James H. Miller, Jr. Steam Electric
Generating Plant Units One and Two dated November 18, 1988,
between ALABAMA and AEC. See Exhibit 10(a)43 herein.
(b) 15 - Operating Agreement for Joint Ownership Interest in the
James H. Miller, Jr. Steam Electric Generating Plant Units
One and Two dated November 18, 1988, between ALABAMA and
AEC. See Exhibit 10(a)44 herein.
(b) 16 - Form of commitment agreement, Amendment No. 1 and
Amendment No. 2 with respect to SOUTHERN, ALABAMA, GEORGIA
and MISSISSIPPI revolving credits. See Exhibit 10(a)46
herein.
(b) 17 - Long Term Transmission Service Agreement between
Entergy Power, Inc. and ALABAMA, MISSISSIPPI and SCS. See
Exhibit 10(a)53 herein.
(b) 18 - Operating Agreement for the Joseph M. Farley Nuclear
Plant between ALABAMA and Southern Nuclear dated as of
December 23, 1991. See Exhibit 10(a)58 herein.
* (b) 19 - The Southern Company Productivity Improvement Plan,
Amended and Restated effective January 1, 1995. See Exhibit
10(a)61 herein.
* (b) 20 - The Southern Company Executive Productivity
Improvement Plan, effective January 1, 1995. See Exhibit
10(a)62 herein.
* (b) 21 - The Southern Company Employee Savings Plan, Amended
and Restated effective July 3, 1995 and First Amendment and
Second Amendment thereto. See Exhibit 10(a)63 herein.
* (b) 22 - The Southern Company Employee Stock Ownership Plan,
Amended and Restated effective April 1, 1995 and First
Amendment thereto. See Exhibit 10(a)64 herein.
(b) 23 - Pension Plan For Employees of ALABAMA, Amended and
Restated effective as of January 1, 1989. See Exhibit
10(a)65 herein.
(b) 24 - The Southern Company Performance Pay Plan, Amended and
Restated effective January 1, 1993. See Exhibit 10(a)69
herein.
* (b) 25 - First Amendment and Second Amendment to The
Southern Company Performance Pay Plan. See Exhibit 10(a)70
herein.
* (b) 26 - Supplemental Benefit Plan for ALABAMA. See Exhibit
10(a)71 herein.
* (b) 27 - The Southern Company Deferred Compensation Plan.
See Exhibit 10(a)77 herein.
<PAGE>
(b) 28 - The Southern Company Outside Directors Pension Plan.
See Exhibit 10(a)76 herein.
* (b) 29 - Outside Directors Stock Plan for Subsidiaries of
The Southern Company and First Amendment thereto. See
Exhibit 10(a)80 herein.
GEORGIA
(c) 1 - Service contracts dated as of January 1, 1984 and
Amendment No. 1 dated as of September 6, 1985, between SCS
and ALABAMA, GEORGIA, GULF, MISSISSIPPI, SEGCO and SOUTHERN.
See Exhibit 10(a)1 herein.
(c) 2 - Interchange contract dated October 28, 1988, effective
January 1, 1989, between ALABAMA, GEORGIA, GULF,
MISSISSIPPI, SAVANNAH and SCS. See Exhibit 10(a)6 herein.
(c) 3 - Agreement dated as of January 27, 1959, Amendment No. 1
dated as of October 27, 1982 and Amendment No. 2 dated
November 4, 1993 and effective June 1, 1994, among SEGCO,
ALABAMA and GEORGIA. See Exhibit 10(a)7 herein.
(c) 4 - Joint Committee Agreement dated as of August 27, 1976,
among GEORGIA, OPC, MEAG and Dalton. See Exhibit 10(a)8
herein.
(c) 5 - Edwin I. Hatch Nuclear Plant Purchase and Ownership
Participation Agreement dated as of January 6, 1975, between
GEORGIA and OPC. See Exhibit 10(a)9 herein.
(c) 6 - Edwin I. Hatch Nuclear Plant Operating Agreement dated
as of January 6, 1975, between GEORGIA and OPC. See Exhibit
10(a)10 herein.
(c) 7 - Revised and Restated Integrated Transmission System
Agreement dated as of November 12, 1990, between GEORGIA and
OPC. See Exhibit 10(a)11 herein.
(c) 8 - Plant Hal Wansley Purchase and Ownership Participation
Agreement dated as of March 26, 1976, between GEORGIA and
OPC. See Exhibit 10(a)12 herein.
(c) 9 - Plant Hal Wansley Operating Agreement dated as of March
26, 1976, between GEORGIA and OPC. See Exhibit 10(a)13
herein.
(c) 10 - Edwin I. Hatch Nuclear Plant Purchase and Ownership
Participation Agreement dated as of August 27, 1976, between
GEORGIA, MEAG and Dalton. See Exhibit 10(a)14 herein.
(c) 11 - Edwin I. Hatch Nuclear Plant Operating Agreement dated
as of August 27, 1976, between GEORGIA, MEAG and Dalton. See
Exhibit 10(a)15 herein.
(c) 12 - Alvin W. Vogtle Nuclear Units Number One and Two
Purchase and Ownership Participation Agreement dated as of
August 27, 1976 and Amendment No. 1 dated as of January 18,
1977, among GEORGIA, OPC, MEAG and Dalton. See Exhibit
10(a)16 herein.
<PAGE>
(c) 13 - Alvin W. Vogtle Nuclear Units Number One and Two
Operating Agreement dated as of August 27, 1976, among
GEORGIA, OPC, MEAG and Dalton. See Exhibit 10(a)17 herein.
(c) 14 - Alvin W. Vogtle Nuclear Units Number One and Two
Purchase, Amendment, Assignment and Assumption Agreement
dated as of November 16, 1983, between GEORGIA and MEAG. See
Exhibit 10(a)18 herein.
(c) 15 - Plant Hal Wansley Purchase and Ownership Participation
Agreement dated as of August 27, 1976, between GEORGIA and
MEAG. See Exhibit 10(a)19 herein.
(c) 16 - Plant Hal Wansley Operating Agreement dated as of
August 27, 1976, between GEORGIA and MEAG. See Exhibit
10(a)20 herein.
(c) 17 - Integrated Transmission System Agreement dated as of
August 27, 1976, between GEORGIA and Dalton. See Exhibit
10(a)21 herein.
(c) 18 - Integrated Transmission System Agreement dated as of
August 27, 1976, between GEORGIA and MEAG. See Exhibit
10(a)22 herein.
(c) 19 - Plant Hal Wansley Purchase and Ownership Participation
Agreement dated as of April 19, 1977, between GEORGIA and
Dalton. See Exhibit 10(a)23 herein.
(c) 20 - Plant Hal Wansley Operating Agreement dated as of April
19, 1977, between GEORGIA and Dalton. See Exhibit 10(a)24
herein.
(c) 21 - Plant Robert W. Scherer Units Number One and Two
Purchase and Ownership Participation Agreement dated as of
May 15, 1980, Amendment No. 1 dated as of December 30, 1985,
Amendment No. 2 dated as of July 1, 1986, Amendment No. 3
dated as of August 1, 1988 and Amendment No. 4 dated as of
December 31, 1990, among GEORGIA, OPC, MEAG and Dalton. See
Exhibit 10(a)25 herein.
(c) 22 - Plant Robert W. Scherer Units Number One and Two
Operating Agreement dated as of May 15, 1980, Amendment No.
1 dated as of December 3, 1985 and Amendment No. 2 dated as
of December 31, 1990, among GEORGIA, OPC, MEAG and Dalton.
See Exhibit 10(a)26 herein.
(c) 23 - Plant Robert W. Scherer Purchase, Sale and Option
Agreement dated as of May 15, 1980, between GEORGIA and
MEAG. See Exhibit 10(a)27 herein.
(c) 24 - Plant Robert W. Scherer Purchase and Sale Agreement
dated as of May 16, 1980, between GEORGIA and Dalton. See
Exhibit 10(a)28 herein.
(c) 25 - Plant Robert W. Scherer Unit Number Three Purchase and
Ownership Participation Agreement dated as of March 1, 1984,
Amendment No. 1 dated as of July 1, 1986 and Amendment No. 2
dated as of August 1, 1988, between GEORGIA and GULF. See
Exhibit 10(a)29 herein.
<PAGE>
(c) 26 - Plant Robert W. Scherer Unit Number Three Operating
Agreement dated as of March 1, 1984, between GEORGIA and
GULF. See Exhibit 10(a)30 herein.
(c) 27 - Plant Robert W. Scherer Unit No. Four Amended and
Restated Purchase and Ownership Participation Agreement by
and among GEORGIA, FP&L and JEA dated as of December 31,
1990 and Amendment No. 1 dated as of June 15, 1994. See
Exhibit 10(a)31 herein.
(c) 28 - Plant Robert W. Scherer Unit No. Four Operating
Agreement by and among GEORGIA, FP&L and JEA dated as of
December 31, 1990 and Amendment No. 1 dated as of June 15,
1994. See Exhibit 10(a)32 herein.
(c) 29 - Amended and Restated Unit Power Sales Agreement dated
February 18, 1982 and Amendment No. 1 dated May 18, 1982,
between FP&L and ALABAMA, GEORGIA, GULF, MISSISSIPPI and
SCS. See Exhibit 10(a)33 herein.
(c) 30 - Amended and Restated Unit Power Sales Agreement dated
May 19, 1982, Amendment No. 1, dated August 30, 1984 and
Amendment No. 2 dated October 30, 1987, between JEA and
ALABAMA, GEORGIA, GULF, MISSISSIPPI and SCS. See Exhibit
10(a)34 herein.
(c) 31 - Unit Power Sales Agreement dated July 19, 1988, between
FPC and ALABAMA, GEORGIA, GULF, MISSISSIPPI, SAVANNAH and
SCS. See Exhibit 10(a)35 herein.
(c) 32 - Amended Unit Power Sales Agreement dated July 20, 1988,
between FP&L and ALABAMA, GEORGIA, GULF, MISSISSIPPI,
SAVANNAH and SCS. See Exhibit 10(a)36 herein.
(c) 33 - Amended Unit Power Sales Agreement dated August 17,
1988, between JEA and ALABAMA, GEORGIA, GULF, MISSISSIPPI,
SAVANNAH and SCS. See Exhibit 10(a)37 herein.
(c) 34 - Unit Power Sales Agreement dated December 8, 1990,
between Tallahassee and ALABAMA, GEORGIA, GULF, MISSISSIPPI,
SAVANNAH and SCS. See Exhibit 10(a)38 herein.
(c) 35 - Power Purchase Agreement dated as of December 3, 1993
between GEORGIA and FPC. See Exhibit 10(a)57 herein.
(c) 36 - Transition Energy Agreement dated December 31, 1990,
between JEA and ALABAMA, GEORGIA, GULF, MISSISSIPPI,
SAVANNAH and SCS. See Exhibit 10(a)39 herein.
(c) 37 - Transition Energy Agreement dated December 31, 1990,
between FP&L and ALABAMA, GEORGIA, GULF, MISSISSIPPI,
SAVANNAH and SCS. See Exhibit 10(a)40 herein.
<PAGE>
(c) 38 - Rocky Mountain Pumped Storage Hydroelectric Project
Ownership Participation Agreement dated November 18, 1988,
between OPC and GEORGIA. See Exhibit 10(a)41 herein.
(c) 39 - Rocky Mountain Pumped Storage Hydroelectric Project
Operating Agreement dated November 18, 1988, between OPC and
GEORGIA. See Exhibit 10(a)42 herein.
(c) 40 - Form of commitment agreement, Amendment No. 1 and
Amendment No. 2 with respect to SOUTHERN, ALABAMA, GEORGIA
and MISSISSIPPI revolving credits. See Exhibit 10(a)46
herein.
(c) 41 - Block Power Sale Agreement between GEORGIA and OPC
dated as of November 12, 1990. See Exhibit 10(a)47 herein.
(c) 42 - Coordination Services Agreement between GEORGIA and OPC
dated as of November 12, 1990. See Exhibit 10(a)48 herein.
(c) 43 - Amended and Restated Nuclear Managing Board Agreement
for Plant Hatch and Plant Vogtle among GEORGIA, OPC, MEAG
and Dalton dated as of July 1, 1993. See Exhibit 10(a)49
herein.
(c) 44 - Integrated Transmission System Agreement, Power Sale
and Coordination Umbrella Agreement between GEORGIA and OPC
dated as of November 12, 1990. See Exhibit 10(a)50 herein.
(c) 45 - Revised and Restated Integrated Transmission System
Agreement between GEORGIA and Dalton dated as of December 7,
1990. See Exhibit 10(a)51 herein.
(c) 46 - Revised and Restated Integrated Transmission System
Agreement between GEORGIA and MEAG dated as of December 7,
1990. See Exhibit 10(a)52 herein.
(c) 47 - Plant Scherer Managing Board Agreement dated as of
December 31, 1990 among GEORGIA, OPC, MEAG, Dalton, GULF,
FP&L and JEA. See Exhibit 10(a)54 herein.
(c) 48 - Plant McIntosh Combustion Turbine Purchase and
Ownership Participation Agreement between GEORGIA and
SAVANNAH dated as of December 15, 1992. See Exhibit 10(a)55
herein.
(c) 49 - Plant McIntosh Combustion Turbine Operating Agreement
between GEORGIA and SAVANNAH dated as of December 15, 1992.
See Exhibit 10(a)56 herein.
(c) 50 - Certificate of Limited Partnership of Georgia Power
Capital. (Designated in Certificate of Notification, File
No. 70-8461, as Exhibit B.)
(c) 51 - Amended and Restated Agreement of Limited Partnership
of Georgia Power Capital, dated as of December 1, 1994.
(Designated in Certificate of Notification, File No.
70-8461, as Exhibit C.)
<PAGE>
(c) 52 - Action of General Partner of Georgia Power Capital
creating the Series A Preferred Securities. (Designated in
Certificate of Notification, File No. 70-8461, as Exhibit
D.)
(c) 53 - Guarantee Agreement of GEORGIA dated as of December 1,
1994, for the benefit of the holders from time to time of
the Series A Preferred Securities. (Designated in
Certificate of Notification, File No. 70-8461, as Exhibit
G.)
(c) 54 - Nuclear Services Agreement between Southern Nuclear and
GEORGIA dated as of October 31, 1991. See Exhibit 10(a)59
herein.
(c) 55 - Nuclear Managing Board Agreement among GEORGIA, OPC,
MEAG and Dalton dated as of November 12, 1990. See Exhibit
10(a)60 herein.
* (c) 56 - The Southern Company Productivity Improvement Plan,
Amended and Restated effective January 1, 1995. See Exhibit
10(a)61 herein.
* (c) 57 - The Southern Company Executive Productivity
Improvement Plan, effective January 1, 1995. See Exhibit
10(a)62 herein.
* (c) 58 - The Southern Company Employee Savings Plan, Amended
and Restated effective July 3, 1995 and First Amendment and
Second Amendment thereto. See Exhibit 10(a)63 herein.
* (c) 59 - The Southern Company Employee Stock Ownership Plan,
Amended and Restated effective April 1, 1995 and First
Amendment thereto. See Exhibit 10(a)64 herein.
(c) 60 - Pension Plan For Employees of GEORGIA, Amended and
Restated effective as of January 1, 1989. See Exhibit
10(a)66 herein.
(c) 61 - The Southern Company Performance Pay Plan, Amended and
Restated effective January 1, 1993. See Exhibit 10(a)69
herein.
* (c) 62 - First Amendment and Second Amendment to The
Southern Company Performance Pay Plan. See Exhibit 10(a)70
herein.
* (c) 63 - Supplemental Benefit Plan for GEORGIA. See Exhibit
10(a)72 herein.
* (c) 64 - The Southern Company Deferred Compensation Plan.
See Exhibit 10(a)77 herein.
(c) 65 - The Southern Company Outside Directors Pension Plan.
See Exhibit 10(a)76 herein.
* (c) 66 - Outside Directors Stock Plan for Subsidiaries of
The Southern Company and First Amendment thereto. See
Exhibit 10(a)80 herein.
<PAGE>
GULF
(d) 1 - Service contracts dated as of January 1, 1984 and
Amendment No. 1 dated as of September 6, 1985, between SCS
and ALABAMA, GEORGIA, GULF, MISSISSIPPI, SEGCO and SOUTHERN.
See Exhibit 10(a)1 herein.
(d) 2 - Interchange contract dated October 28, 1988, effective
January 1, 1989, between ALABAMA, GEORGIA, GULF,
MISSISSIPPI, SAVANNAH and SCS. See Exhibit 10(a)6 herein.
(d) 3 - Plant Robert W. Scherer Unit Number Three Purchase and
Ownership Participation Agreement dated as of March 1, 1984,
Amendment No. 1 dated as of July 1, 1986 and Amendment No. 2
dated as of August 1, 1988, between GEORGIA and GULF. See
Exhibit 10(a)29 herein.
(d) 4 - Plant Robert W. Scherer Unit Number Three Operating
Agreement dated as of March 1, 1984, between GEORGIA and
GULF. See Exhibit 10(a)30 herein.
(d) 5 - Plant Scherer Managing Board Agreement dated as of
December 31, 1990 among GEORGIA, OPC, MEAG, Dalton, GULF,
FP&L and JEA. See Exhibit 10(a)54 herein.
(d) 6 - Amended and Restated Unit Power Sales Agreement dated
February 18, 1982 and Amendment No. 1 dated May 18, 1982,
between FP&L and ALABAMA, GEORGIA, GULF, MISSISSIPPI and
SCS. See Exhibit 10(a)33 herein.
(d) 7 - Amended and Restated Unit Power Sales Agreement dated
May 19, 1982, Amendment No. 1 dated August 30, 1984 and
Amendment No. 2 dated October 30, 1987, between JEA and
ALABAMA, GEORGIA, GULF, MISSISSIPPI and SCS. See Exhibit
10(a)34 herein.
(d) 8 - Unit Power Sales Agreement dated July 19, 1988, between
FPC and ALABAMA, GEORGIA, GULF, MISSISSIPPI, SAVANNAH and
SCS. See Exhibit 10(a)35 herein.
(d) 9 - Amended Unit Power Sales Agreement dated July 20, 1988,
between FP&L and ALABAMA, GEORGIA, GULF, MISSISSIPPI,
SAVANNAH and SCS. See Exhibit 10(a)36 herein.
(d) 10 - Amended Unit Power Sales Agreement dated August 17,
1988, between JEA and ALABAMA, GEORGIA, GULF, MISSISSIPPI,
SAVANNAH and SCS. See Exhibit 10(a)37 herein.
(d) 11 - Agreement between GULF and AEC, effective August 1,
1985. (Designated in GULF's Form 10-K for the year ended
December 31, 1985, File No. 0-2429, as Exhibit 10(g).)
(d) 12 - Unit Power Sales Agreement dated December 8, 1990,
between Tallahassee and ALABAMA, GEORGIA, GULF, MISSISSIPPI,
SAVANNAH and SCS. See Exhibit 10(a)38 herein.
<PAGE>
(d) 13 - Transition Energy Agreement dated December 31, 1990,
between JEA and ALABAMA, GEORGIA, GULF, MISSISSIPPI,
SAVANNAH and SCS. See Exhibit 10(a)39 herein.
(d) 14 - Transition Energy Agreement dated December 31, 1990,
between FP&L and ALABAMA, GEORGIA, GULF, MISSISSIPPI,
SAVANNAH and SCS. See Exhibit 10(a)40 herein.
* (d) 15 - The Southern Company Productivity Improvement Plan,
Amended and Restated effective January 1, 1995. See Exhibit
10(a)61 herein.
* (d) 16 - The Southern Company Executive Productivity
Improvement Plan, effective January 1, 1995. See Exhibit
10(a)62 herein.
* (d) 17 - The Southern Company Employee Savings Plan, Amended
and Restated effective July 3, 1995 and First Amendment and
Second Amendment thereto. See Exhibit 10(a)63 herein.
* (d) 18 - The Southern Company Employee Stock Ownership Plan,
Amended and Restated effective April 1, 1995 and First
Amendment thereto. See Exhibit 10(a)64 herein.
(d) 19 - Pension Plan For Employees of GULF, Amended and
Restated effective as of January 1, 1989. (Designated in
GULF's Form 10-K for the year ended December 31, 1994, File
No. 0-2429, as Exhibit 10(d)18.)
(d) 20 - The Southern Company Performance Pay Plan, Amended and
Restated effective January 1, 1993. See Exhibit 10(a)69
herein.
* (d) 21 - First Amendment and Second Amendment to The
Southern Company Performance Pay Plan. See Exhibit 10(a)70
herein.
* (d) 22 - Supplemental Benefit Plan for GULF.
* (d) 23 - The Southern Company Deferred Compensation Plan.
See Exhibit 10(a)77 herein.
(d) 24 - The Southern Company Outside Directors Pension Plan.
See Exhibit 10(a)76 herein.
* (d) 25 - Outside Directors Stock Plan for Subsidiaries of
The Southern Company and First Amendment thereto. See
Exhibit 10(a)80 herein.
MISSISSIPPI
(e) 1 - Service contracts dated as of January 1, 1984 and
Amendment No. 1 dated September 6, 1985, between SCS and
ALABAMA, GEORGIA, GULF, MISSISSIPPI, SEGCO and SOUTHERN. See
Exhibit 10(a)1 herein.
<PAGE>
(e) 2 - Interchange contract dated October 28, 1988, effective
January 1, 1989, between ALABAMA, GEORGIA, GULF,
MISSISSIPPI, SAVANNAH and SCS. See Exhibit 10(a)6 herein.
(e) 3 - Amended and Restated Unit Power Sales Agreement dated
February 18, 1982 and Amendment No. 1 dated May 18, 1982,
between FP&L and ALABAMA, GEORGIA, GULF, MISSISSIPPI and
SCS. See Exhibit 10(a)33 herein.
(e) 4 - Amended and Restated Unit Power Sales Agreement dated
May 19, 1982, Amendment No. 1 dated August 30, 1984, and
Amendment No. 2 dated October 30, 1987, between JEA and
ALABAMA, GEORGIA, GULF, MISSISSIPPI and SCS. See Exhibit
10(a)34 herein.
(e) 5 - Unit Power Sales Agreement dated July 19, 1988, between
FPC and ALABAMA, GEORGIA, GULF, MISSISSIPPI, SAVANNAH and
SCS. See Exhibit 10(a)35 herein.
(e) 6 - Amended Unit Power Sales Agreement dated July 20, 1988,
between FP&L and ALABAMA, GEORGIA, GULF, MISSISSIPPI,
SAVANNAH and SCS. See Exhibit 10(a)36 herein.
(e) 7 - Amended Unit Power Sales Agreement dated August 17,
1988, between JEA and ALABAMA, GEORGIA, GULF, MISSISSIPPI,
SAVANNAH and SCS. See Exhibit 10(a)37 herein.
(e) 8 - Unit Power Sales Agreement dated December 8, 1990,
between Tallahassee and ALABAMA, GEORGIA, GULF, MISSISSIPPI,
SAVANNAH and SCS. See Exhibit 10(a)38 herein.
(e) 9 - Transition Energy Agreement dated December 31, 1990,
between JEA and ALABAMA, GEORGIA, GULF, MISSISSIPPI,
SAVANNAH and SCS. See Exhibit 10(a)39 herein.
(e) 10 - Transition Energy Agreement dated December 31, 1990,
between FP&L and ALABAMA, GEORGIA, GULF, MISSISSIPPI,
SAVANNAH and SCS. See Exhibit 10(a)40 herein.
(e) 11 - Transmission Facilities Agreement dated February 25,
1982, Amendment No. 1 dated May 12, 1982 and Amendment No. 2
dated December 6, 1983, between Gulf States and MISSISSIPPI.
See Exhibit 10(a)45 herein.
(e) 12 - Form of commitment agreement, Amendment No. 1 and
Amendment No. 2 with respect to SOUTHERN, ALABAMA, GEORGIA
and MISSISSIPPI revolving credits. See Exhibit 10(a)46
herein.
(e) 13 - Long Term Transmission Service Agreement between
Entergy Power, Inc. and ALABAMA MISSISSIPPI and SCS. See
Exhibit 10(a)53 herein.
* (e) 14 - The Southern Company Productivity Improvement Plan,
Amended and Restated effective January 1, 1995. See Exhibit
10(a)61 herein.
<PAGE>
* (e) 15 - The Southern Company Executive Productivity
Improvement Plan, effective January 1, 1995. See Exhibit
10(a)62 herein.
* (e) 16 - The Southern Company Employee Savings Plan, Amended
and Restated effective July 3, 1995 and First Amendment and
Second Amendment thereto. See Exhibit 10(a)63 herein.
* (e) 17 - The Southern Company Employee Stock Ownership Plan,
Amended and Restated effective April 1, 1995 and First
Amendment thereto. See Exhibit 10(a)64 herein.
(e) 18 - Pension Plan For Employees of MISSISSIPPI, Amended and
Restated effective as of January 1, 1989. (Designated in
MISSISSIPPI's Form 10-K for the year ended December 31,
1994, File No. 0-6849, as Exhibit 10(e)18.)
(e) 19 - The Southern Company Performance Pay Plan, Amended and
Restated effective January 1, 1993. See Exhibit 10(a)69
herein.
* (e) 20 - First Amendment and Second Amendment to The
Southern Company Performance Pay Plan. See Exhibit 10(a)70
herein.
* (e) 21 - Supplemental Benefit Plan for MISSISSIPPI.
* (e) 22 - The Southern Company Deferred Compensation Plan.
See Exhibit 10(a)77 herein.
(e) 23 - The Southern Company Outside Directors Pension Plan.
See Exhibit 10(a)76 herein.
* (e) 24 - Outside Directors Stock Plan for Subsidiaries of
The Southern Company and First Amendment thereto. See
Exhibit 10(a)80 herein.
SAVANNAH
(f) 1 - Service contract dated as of March 3, 1988, between SCS
and SAVANNAH. See Exhibit 10(a)3 herein.
(f) 2 - Interchange contract dated October 28, 1988, effective
January 1, 1989, between ALABAMA, GEORGIA, GULF,
MISSISSIPPI, SAVANNAH and SCS. See Exhibit 10(a)6 herein.
(f) 3 - Unit Power Sales Agreement dated July 19, 1988, between
FPC and ALABAMA, GEORGIA, GULF, MISSISSIPPI, SAVANNAH and
SCS. See Exhibit 10(a)35 herein.
(f) 4 - Amended Unit Power Sales Agreement dated July 20, 1988,
between FP&L and ALABAMA, GEORGIA, GULF, MISSISSIPPI,
SAVANNAH and SCS. See Exhibit 10(a)36 herein.
<PAGE>
(f) 5 - Amended Unit Power Sales Agreement dated August 17,
1988, between JEA and ALABAMA, GEORGIA, GULF, MISSISSIPPI,
SAVANNAH and SCS. See Exhibit 10(a)37 herein.
(f) 6 - Unit Power Sales Agreement dated December 8, 1990,
between Tallahassee and ALABAMA, GEORGIA, GULF, MISSISSIPPI,
SAVANNAH and SCS. See Exhibit 10(a)38 herein.
(f) 7 - Transition Energy Agreement dated December 31, 1990,
between JEA and ALABAMA, GEORGIA, GULF, MISSISSIPPI,
SAVANNAH and SCS. See Exhibit 10(a)39 herein.
(f) 8 - Transition Energy Agreement dated December 31, 1990,
between FP&L and ALABAMA, GEORGIA, GULF, MISSISSIPPI,
SAVANNAH and SCS. See Exhibit 10(a)40 herein.
(f) 9 - Plant McIntosh Combustion Turbine Purchase and Ownership
Participation Agreement between GEORGIA and SAVANNAH dated
as of December 15, 1992. See Exhibit 10(a)55 herein.
(f) 10 - Plant McIntosh Combustion Turbine Operating Agreement
between GEORGIA and SAVANNAH dated December 15, 1992. See
Exhibit 10(a)56 herein.
* (f) 11 - The Southern Company Productivity Improvement Plan,
Amended and Restated effective January 1, 1995. See Exhibit
10(a)61 herein.
* (f) 12 - The Southern Company Executive Productivity
Improvement Plan, effective January 1, 1995. See Exhibit
10(a)62 herein.
* (f) 13 - The Southern Company Employee Savings Plan, Amended
and Restated effective July 3, 1995 and First Amendment and
Second Amendment thereto. See Exhibit 10(a)63 herein.
* (f) 14 - The Southern Company Employee Stock Ownership Plan,
Amended and Restated effective April 1, 1995 and First
Amendment thereto. See Exhibit 10(a)64 herein.
(f) 15 - Employees' Retirement Plan of SAVANNAH, Amended and
Restated effective January 1, 1989. (Designated in
SAVANNAH's Form 10-K for the year ended December 31, 1994,
File No. 1-5072, as Exhibit 10(f)15.)
* (f) 16 - First Amendment to the Employees' Retirement Plan
of SAVANNAH.
* (f) 17 - Supplemental Executive Retirement Plan of SAVANNAH,
Amended and Restated effective January 1, 1996.
(f) 18 - Deferred Compensation Plan for Key Employees of
SAVANNAH. (Designated in SAVANNAH's Form 10-K for the year
ended December 31, 1994, File No. 1-5072, as Exhibit
10(f)17.)
<PAGE>
* (f) 19 - First Amendment to the Deferred Compensation Plan
for Key Employees of SAVANNAH.
(f) 20 - The Southern Company Performance Pay Plan, Amended and
Restated effective January 1, 1993. See Exhibit 10(a)69
herein.
* (f) 21 - First Amendment and Second Amendment to The
Southern Company Performance Pay Plan. See Exhibit 10(a)70
herein.
(f) 22 - The Southern Company Outside Directors Pension Plan.
See Exhibit 10(a)76 herein.
(f) 23 - Deferred Compensation Plan for Directors of SAVANNAH.
(Designated in SAVANNAH's Form 10-K for the year ended
December 31, 1994, File No. 1-5072, as Exhibit 10(f)20.)
* (f) 24 - Outside Directors Stock Plan for Subsidiaries of
The Southern Company and First Amendment thereto. See
Exhibit 10(a)80 herein.
(21) *Subsidiaries of Registrants - Contained herein at page IV-5.
(23) Consents of Experts and Counsel
SOUTHERN
* (a) - The consent of Arthur Andersen LLP is contained herein
at page IV-6.
ALABAMA
* (b) - The consent of Arthur Andersen LLP is contained herein
at page IV-7.
GEORGIA
* (c) - The consent of Arthur Andersen LLP is contained herein
at page IV-8.
GULF
* (d) - The consent of Arthur Andersen LLP is contained herein
at page IV-9.
MISSISSIPPI
* (e) - The consent of Arthur Andersen LLP is contained herein
at page IV-10.
SAVANNAH
* (f) - The consent of Arthur Andersen LLP is contained herein
at page IV-11.
<PAGE>
(24) Powers of Attorney and Resolutions
SOUTHERN
* (a) - Power of Attorney and resolution.
ALABAMA
* (b) - Power of Attorney and resolution.
GEORGIA
* (c) - Power of Attorney and resolution.
GULF
* (d) - Power of Attorney and resolution.
MISSISSIPPI
* (e) - Power of Attorney and resolution.
SAVANNAH
* (f) - Power of Attorney and resolution.
(27) Financial Data Schedule
SOUTHERN
(a) - Financial Data Schedule. (Designated in Form 8-K dated
February 21, 1996, File No. 1-3526, as Exhibit 27.)
ALABAMA
(b) - Financial Data Schedule. (Designated in Form 8-K dated
February 21, 1996, File No. 1-3164, as Exhibit 27.)
GEORGIA
(c) - Financial Data Schedule. (Designated in Form 8-K dated
February 21, 1996, File No. 1-6468, as Exhibit 27.)
GULF
(d) - Financial Data Schedule. (Designated in Form 8-K dated
February 21, 1996, File No. 0-2429, as Exhibit 27.)
<PAGE>
MISSISSIPPI
(e) - Financial Data Schedule. (Designated in Form 8-K dated
February 21, 1996, File No. 0-6849, as Exhibit 27.)
SAVANNAH
(f) - Financial Data Schedule. (Designated in Form 8-K dated
February 21, 1996, File No. 1-5072, as Exhibit 27.)
EXHIBIT 1(c)
Georgia Power Company
$300,000,000
First Mortgage Bonds
Secured Medium-Term Notes
Due From One to 40 Years
DISTRIBUTION AGREEMENT
November 29, 1995
Lehman Brothers
Lehman Brothers Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
J.P. Morgan Securities Inc.
Salomon Brothers Inc
Smith Barney Inc.
c/o Lehman Brothers Inc.
3 World Financial Center, 12th Floor
New York, New York 10285-1200
Ladies and Gentlemen:
Georgia Power Company, a Georgia corporation (the "Company"),
confirms its agreement with each of you (individually, an "Agent" and
collectively, the "Agents") with respect to the issue and sale by the Company of
up to an aggregate of $300,000,000 principal amount of its First Mortgage Bonds,
Secured Medium-Term Notes, Due From One to 40 Years (the "Notes"). The Notes are
to be issued from time to time under the Indenture, dated as of March 1, 1941
(said Indenture, as supplemented or amended from time to time being hereinafter
called the "Indenture"), between the Company and Chemical Bank, as trustee (the
"Trustee").
Subject to the terms and conditions stated herein, and subject
to the reservation by the Company of the rights to sell Notes directly on its
own behalf, and to sell Notes to or through such other agents as it may
designate from time to time (provided that any other agent ("Additional Agent")
will execute an agreement with the Company which contains substantially the same
terms and conditions herein and that the Company will notify each Agent of its
agreement with any other agent), the Company hereby appoints the Agents as
agents for the purpose of soliciting purchases of
<PAGE>
the Notes from the Company by others and agrees that whenever the Company
determines to sell Notes directly to an Agent as principal for resale to others,
it will enter into a Purchase Agreement (hereafter defined) relating to such
sale in accordance with the provisions of Section 10 hereof. Each Agent may,
with the prior approval of the Company (which approval shall not be unreasonably
withheld), appoint sub-agents or engage the services of any other broker or
dealer in connection with the offer or sale of the Notes. The Company shall
notify the Agents of any sale made to or through other agents on or prior to the
settlement date for such sale.
The Notes shall have the maturity ranges, annual interest
rates, redemption provisions and other terms set forth in the Prospectus
referred to in Section 1(a) as it may be amended or supplemented from time to
time, including any supplement providing for, among other things, the interest
rate and maturity of any Note (a "Pricing Supplement"). The Notes will be
issued, and the terms thereof established, from time to time, by the Company in
accordance with the Indenture and the Procedures (as defined herein) referred to
below. This Agreement shall only apply to sales of the Notes and not to sales of
any other securities or evidences of indebtedness of the Company and only on the
specific terms set forth herein. The Agents may take any action contemplated by
this Agreement through wholly-owned subsidiaries.
SECTION 1. Representations, Warranties and
Agreements.
The Company represents and warrants to each Agent as of the
date hereof, as of the Closing Date (defined herein) and as of the times
referred to in Sections 5(a) and 5(b) hereof (the Closing Date and each such
time being hereinafter sometimes referred to as a "Representation Date"), as
follows:
(a) The Company meets all of the requirements for the use of
Form S-3 under the Securities Act of 1933, as amended (the "Act"). The Company
has prepared and filed with the Securities and Exchange Commission (the
"Commission") two registration statements on Form S-3 (File Nos. 33-60345 and
33-49661) in the forms heretofore delivered to the Agents and said registration
statements in said forms have been declared effective by the Commission; the
Company has included in Registration Statement File No. 33-60345 a basic
prospectus which, pursuant to Rule 429 under the Act, is a combined prospectus,
also relating to securities included in Registration Statement File No. 33-
49661; no stop order suspending the effectiveness of said registration
statements or the use of the Prospectus (as
2
<PAGE>
hereinafter defined) has been issued and no proceeding for that purpose has been
initiated or threatened by the Commission (said registration statements,
including the exhibits thereto and all documents incorporated by reference
therein pursuant to Item 12 of Form S-3 at the time the registration statement
in File No. 33-60345 became effective, and as from time to time amended or
supplemented thereafter, collectively being hereinafter called the "Registration
Statements" and each individually being hereinafter called the "Registration
Statement"; the prospectus (including all documents incorporated therein by
reference) included in the Registration Statement in File No. 33-60345, together
with any amendments or supplements (including in each case all documents
incorporated therein by reference and the applicable Pricing Supplement)
relating to the Notes, as filed with the Commission pursuant to Section 424(b)
of the rules and regulations of the Commission under the Act (the "Rules and
Regulations") being hereinafter called the "Prospectus").
(b) The Registration Statement, when it became effective, did
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading and the Prospectus, at the time the Registration Statement in
File No. 33-60345 became effective did not, and as of the date hereof does not,
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; the Registration Statement and
Prospectus comply, and at the applicable Representation Date, the Registration
Statement and the Prospectus, as they may be amended or supplemented, will
comply, or be deemed to comply, in all material respects with the provisions of
the Act and the Rules and Regulations, at the applicable Representation Date the
Registration Statement, as it may be amended or supplemented, will not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and at the applicable Representation Date the Prospectus, as it may
be amended or supplemented, will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading; and
all documents incorporated in the Prospectus by reference pursuant to Item 12 of
Form S-3 when filed pursuant to the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), complied or, when so filed, will comply in all material
respects with the applicable provisions of the Exchange Act and the rules and
regulations of the Commission thereunder, and, on said dates, when read together
with the
3
<PAGE>
Prospectus, or the Prospectus as it may be otherwise amended or supplemented,
will not contain an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
Company makes no warranty or representation to any Agent with respect to any
statements or omissions made in reliance upon and in conformity with information
furnished in writing to the Company by, or on behalf of, such Agent specifically
for inclusion in the Registration Statement or the Prospectus, or to any
statements in, or omissions from that part of the Registration Statement that
shall constitute the Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939, as amended, of the Trustee under the Indenture.
(c) The consummation of the transactions herein contemplated
and the performance by the Company of the terms of this agreement will not
violate any of the terms, conditions or provisions of, or constitute a default
under, any indenture or other contract or agreement to which the Company is now
a party or the charter or by-laws of the Company or any order of any court or
administrative agency entered in any proceedings to which the Company is now a
party.
(d) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Georgia, with corporate power and authority to carry on the public utility
business in which it is engaged and to own and operate the properties used by it
in such business as described in the Prospectus, as amended or supplemented.
(e) The Notes have been duly authorized and, when the terms of
the Notes and of their issue and sale have been duly established in accordance
with the Indenture and the Notes have been duly executed, authenticated, issued
and delivered against payment of the agreed upon consideration therefor, such
Notes will have been duly executed, authenticated, issued and delivered and will
constitute valid and legally binding obligations of the Company entitled to the
benefits provided by the Indenture; the Indenture has been duly authorized by
the Company, has been duly qualified under the Trust Indenture Act, has been
duly executed and delivered by the Company and the Trustee and constitutes a
valid and legally binding obligation of the Company, enforceable in accordance
with its terms, except as enforcement thereof may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting enforcement of
creditors' rights generally and except as enforcement thereof is subject to
general principles of
4
<PAGE>
equity; and the Notes and the Indenture conform to the
description thereof contained in the Prospectus.
(f) Except as set forth in the Prospectus, there are no
actions, suits or proceedings before or by any court or governmental agency or
body, domestic or foreign, pending, or, to the knowledge of the Company,
threatened against or, to the knowledge of the Company, affecting the Company,
which are, individually or in the aggregate, reasonably expected to result in
any material adverse change in the business, properties or financial condition
of the Company or which is reasonably expected to materially and adversely
affect the consummation by the Company of this Agreement or the issuance and
sale by the Company of any of the Notes.
(g) This Agreement and the Purchase Agreement (if any) with
respect to the Notes have been duly authorized, executed and delivered by the
Company.
(h) The Company is not in violation of its charter or in
default in the performance or observance of any obligation, agreement, covenant
or condition contained in any contract, indenture, mortgage, loan agreement,
note, lease or other agreement or instrument to which the Company is a party or
by which it may be bound, or to which any of the property or assets of the
Company is subject, other than defaults (considered in the aggregate) which do
not have, or which would not reasonably be expected to result in, a material
adverse effect on the business, properties or financial condition of the
Company.
(i) The Order of the Georgia Public Service Commission
approving the issuance of the Notes has been duly issued and remains in full
force and effect without amendment or modification, and is not the subject of
any appeal or other proceeding.
SECTION 2. Solicitations as Agent.
(a) Reasonable Best Efforts to Solicit. On the
----------------------------------
basis of the representations and warranties contained
herein, but subject to the terms and conditions herein set
forth, each Agent agrees, as an agent of the Company, upon
receipt of instructions from the Company, to use its
reasonable best efforts to solicit offers to purchase the
Notes upon the terms and conditions set forth in the
Prospectus.
(b) Suspension of Solicitation. The Company
reserves the right, in its sole discretion, to suspend
solicitation of offers to purchase the Notes commencing at
any time for any period of time or permanently. Upon
5
<PAGE>
receipt of at least one business day's prior notice from the Company, the Agents
will forthwith suspend solicitation of offers to purchase Notes from the Company
until such time as the Company has advised the Agents that such solicitation may
be resumed. Upon receipt of such notice by the Agents, the Company's obligations
to deliver the officers' certificates, opinions of counsel and letters from
accountants required to be delivered by Sections 5(b), 5(c) and 5(d) hereof for
each such amendment or supplement to the Registration Statement or Prospectus
occurring since the date of such notice shall likewise be suspended until the
earlier of (i) receipt by the Agents of notice from the Company to re-commence
solicitation of offers to purchase the Notes and (ii) such time that the Company
delivers, or causes to be delivered, as the case may be, to the Agents such
certificate(s), opinion(s) and letter(s) relating to the amendments or
supplements to the Registration Statement or the Prospectus or the documents
incorporated by reference into the Prospectus since the last certificates,
opinions or letters so delivered, except that such certificates, opinions and
letters need not cover any statement in any such document which does not
constitute part of the Registration Statement or the Prospectus pursuant to Rule
412 of the Act. For the purpose of this paragraph, "business day" shall mean any
day which is not a Saturday or Sunday and which in New York City is not a day on
which banking institutions are generally authorized or obligated by law or
executive order to close.
(c) Agent's Commission. Promptly upon the closing of the sale
of any Notes sold by the Company as a result of a solicitation made by an Agent,
the Company Agrees to pay such Agent a commission, which may be in the form of a
discount, in accordance with the schedule set forth in Exhibit C hereto.
(d) Solicitation of Offers. The Agents are authorized to
solicit offers to purchase the Notes only in denominations of $1,000 or any
amount in excess thereof which is an integral multiple of $1,000, at a purchase
price equal to 100% of the principal amount thereof or such other principal
amount as shall be specified by the Company. Each Agent shall communicate to the
Company, orally or in writing, each offer to purchase Notes received by it as
Agent, and which it determines to be reasonable in its discretion reasonably
exercised. The Company shall have the sole right to accept offers to purchase
the Notes and may reject any such offer in whole or in part. Each Agent shall
have the right, in its discretion reasonably exercised without advising the
Company, to reject any offer to purchase the Notes received by it, in whole or
in part, and any such rejection shall not be deemed a breach of its agreement
contained herein.
6
<PAGE>
(e) Administrative Procedures. Administrative procedures
respecting the sale of Notes (the "Procedures") are set forth in Exhibit D
hereto and may be amended in writing from time to time by the Agents and the
Company. Each Agent and the Company agree to perform the respective duties and
obligations specifically provided to be performed by each of them herein and in
the Procedures.
(f) Delivery of Documents. The documents required to be
delivered by Section 4 hereof shall be delivered at the offices of Dewey
Ballantine, 1301 Avenue of the Americas, New York, New York 10019, not later
than 10:00 A.M., New York time, on the date of this Agreement or at such later
time as may be mutually agreed upon by the Company and the Agents, which in no
event shall be later than the time at which the Agents commence solicitation of
offers to purchase Notes hereunder (the "Closing Date").
SECTION 3. Covenants of the Company.
The Company covenants and agrees:
(a) Filing of Prospectus Supplements. Within the
time prescribed by Rule 424 under the Act, to file the
Prospectus Supplement and any Pricing Supplement with the
Commission and to advise the Agents of such filing and to
confirm such advice in writing;
(b) Amendment to Registration Statement or Prospectus. As soon
as the Company is advised thereof, to advise the Agents and confirm the advice
in writing of any request made by the Commission for amendments to the
Registration Statement or Prospectus, including any amendment to any of the
documents incorporated therein by reference pursuant to Item 12 of Form S-3, or
if it is necessary at any time to amend the Prospectus to comply with the Act,
to notify the Agents promptly, in writing, to suspend solicitation of purchases
of the Notes (and, if so notified, such Agents shall cease such solicitation as
soon as practicable, but in any event not more than one (1) business day after
such notification), or of the issue of a stop order suspending the effectiveness
of the Registration Statement or of the initiation or threat of any proceedings
for that purpose and, if such a stop order should be issued by the Commission,
to make every reasonable effort to obtain the lifting or removal thereof as soon
as possible;
(c) Delivery of Prospectus. To deliver to the Agents, without
charge, as soon as practicable on or after the date this agreement becomes
effective, and from time to time thereafter during such period of time as the
Agents are required by law to deliver a prospectus, as many copies of the
Prospectus (as supplemented or amended, if the Company
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shall have made any supplements or amendments thereto) as
the Agents may reasonably request;
(d) Commission Filings. During such period of
time after the date this agreement becomes effective as the
Agents are required by law to deliver a prospectus, to file
timely all documents required to be filed with the
Commission pursuant to Section 13 or 14 of the Exchange Act;
(e) Revisions to Prospectus - Material Changes. If, during any
period in which, in the opinion of counsel to the Agents, a prospectus relating
to the Notes is to be delivered under the Act, any event shall have occurred as
a result of which it is necessary to amend or supplement the Prospectus in order
to make the statements therein, in light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, forthwith to amend or
supplement the Prospectus by either (i) preparing and furnishing, at its own
expense, to the Agents, either amendments to the Prospectus or supplements
thereto, or (ii) making an appropriate filing pursuant to Section 13 or 14 of
the Exchange Act which would supplement or amend the Prospectus, so that the
statements in the Prospectus as so amended or supplemented will not, in light of
the circumstances when the Prospectus is delivered to a purchaser, be
misleading;
(f) Earnings Statements. To make generally available to the
Company's security holders, as soon as practicable, an earnings statement (which
need not be audited) covering a period of at least twelve months beginning with
the first day of the month immediately following the effective date of the
Registration Statement as defined in Rule 158(c) under the Act, which earnings
statement shall satisfy the provisions of Section 11(a) of the Act;
(g) Blue Sky Qualifications. To use its best efforts to
qualify the Notes for offer and sale under the securities or blue sky laws of
such jurisdictions as the Agents may designate and to maintain such
qualifications in effect for so long as may be required for distribution of the
Notes and to pay filing fees and disbursements in connection therewith in an
amount not exceeding $3,500 in the aggregate (including filing fees and
disbursements paid or incurred prior to the date this agreement becomes
effective); provided, however, that the Company shall not be required to qualify
as a foreign corporation or to file a consent to service of process or to file
annual reports or to comply with any other requirements deemed by the Company to
be unduly burdensome;
(h) Expenses. To pay expenses, fees and taxes
(other than transfer taxes) in connection with (1) the
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<PAGE>
preparation and filing of the Registration Statement and Prospectus, (2) the
preparation, execution, filing and recording of each new supplemental indenture
pursuant to which the Notes are to be issued, (3) the issue and delivery of the
Notes, (4) the fees and expenses of the Trustee, any paying agent, any
calculation agent, any exchange rate agent and any other agents appointed by the
Company, and their respective counsel, (5) the fees and disbursements of counsel
to the Company and counsel to the Agents, (6) the fees and expenses of counsel
to the Agents in addition to the expenses provided in Section 3(g) and (7) the
furnishing of the opinions, letters and certificates referred to in Section 4(b)
hereof;
(i) Notice to Agents of Certain Events. To
----------------------------------
advise the Agents immediately (i) when any post-effective
amendment to the Registration Statement relating to or
covering the Notes becomes effective and (ii) of receipt by
the Company of any notification with respect to the
suspension of the qualification of the Notes for sale in any
jurisdiction or the initiation or threat of any proceeding
for that purpose; and
(j) Copies of Reports, Releases and Financial Statements. So
long as any of the Notes are outstanding, to furnish to the Agents, not later
than the time the Company makes the same publicly available, copies of all
public reports or releases and all reports and financial statements furnished by
the Company to any securities exchange on which the Notes are listed pursuant to
requirements of or agreements with such exchange or to the Commission pursuant
to the Exchange Act or any rule or regulation of the Commission thereunder.
SECTION 4. Conditions.
The obligation of the Agents, as agents of the Company, under
this Agreement to solicit offers to purchase the Notes, the obligation of any
person who has agreed to purchase Notes to make payment for and take delivery of
Notes, and the obligation of any Agent to purchase Notes pursuant to any
Purchase Agreement (as defined herein), is subject to the accuracy, on each
Representation Date, of the representations and warranties of the Company
contained herein, to the accuracy of the statements of the Company's officers
made in any certificate furnished pursuant to the provisions hereof, to the
performance by the Company of its obligations hereunder, and to each of the
following additional terms and conditions:
(a) Legal Proceedings. That all legal
proceedings to be taken by the Company in connection with
the issue and sale of the Notes and the legal opinion
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provided for in Section 4(b)(1) hereof shall be satisfactory in form and
substance to Dewey Ballantine.
(b) Opinions and Accountant's Letter. That, on the Closing
Date, the Agents shall be furnished the following opinions and letter, with such
changes therein as may be agreed upon by the Company and the Agents with the
approval of Dewey Ballantine.
(1) Opinion of Troutman Sanders LLP, of Atlanta,
Georgia, Counsel to the Company, substantially in the form attached
hereto as Exhibit A.
(2) Opinion of Dewey Ballantine, of New
York, New York, Counsel to the Agents, substantially in
the form attached hereto as Exhibit B.
(3) Letter dated the Closing Date from Arthur
Andersen LLP to the effect that: (i) they are independent public
accountants with respect to the Company within the meaning of the Act
and the applicable published rules and regulations thereunder; (ii) in
their opinion, the financial statements audited by them and
incorporated by reference in the Prospectus comply as to form in all
material respects with the applicable accounting requirements of the
Act and the Exchange Act, and the related published rules and
regulations thereunder; (iii) on the basis of certain limited
procedures performed through a specified date not more than five
business days prior to the date of such letter, namely, (a) performing
the procedures specified by the American Institute of Certified Public
Accountants for a review of interim financial information as described
in Statement on Auditing Standards No. 71, "Interim Financial
Information", on the unaudited financial statements, if any, of the
Company incorporated in the Prospectus and of the latest available
unaudited financial statements of the Company, if any, as of a date
subsequent to the date of those incorporated in the Prospectus, (b)
reading the minute books of the Company and (c) making inquiries of
certain officials of the Company who have responsibility for financial
and accounting matters regarding such unaudited financial statements or
any specified unaudited amounts derived therefrom (it being understood
that the foregoing procedures do not constitute an audit performed in
accordance with generally accepted auditing standards and they would
not necessarily reveal matters of significance with respect to the
comments made in such letter, and accordingly that Arthur Andersen LLP
make no representations as to the sufficiency of such procedures for
the Agents' purposes), nothing came to
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<PAGE>
their attention that caused them to believe that: (A) the unaudited
financial statements, if any, incorporated in the Prospectus do not
comply as to form in all material respects with the applicable
accounting requirements of the Exchange Act as it applies to Form 10-Q
and the published rules and regulations thereunder; (B) any material
modifications should be made to such unaudited financial statements for
them to be in conformity with generally accepted accounting principles;
(C) the unaudited amounts for Operating Revenues, Income Before
Interest Charges and Net Income After Dividends on Preferred Stock and
the unaudited Ratios of Earnings to Fixed Charges and Earnings to Fixed
Charges Plus Preferred Dividend Requirements (Pre-Income Tax Basis) set
forth in the Prospectus do not agree with the amounts set forth in or
derived from the unaudited financial statements of the same period or
were not determined on a basis substantially consistent with that of
the corresponding audited amounts incorporated or included in the
Prospectus; or (D) as of a specified date not more than five business
days prior to the date of delivery of such letter, there has been any
change in the capital stock or long-term debt of the Company or any
decrease in net assets as compared with amounts shown in the latest
audited balance sheet incorporated in the Prospectus, except in each
case for changes or decreases (i) which the Prospectus discloses have
occurred or may occur, (ii) which are occasioned by the declaration of
dividends, (iii) which are occasioned by regularly scheduled payments
of capitalized lease obligations, (iv) which are occasioned by the
purchase or redemption of bonds or stock to satisfy mandatory
redemption provisions relating thereto or (v) which are disclosed in
such letter.
(c) Amendments or Supplements. That no amendment or supplement
to the Registration Statement or Prospectus filed subsequent to the time this
agreement becomes effective (including any filing made by the Company pursuant
to Section 13 or 14 of the Exchange Act) shall be unsatisfactory in form to
Dewey Ballantine or shall contain information (other than with respect to an
amendment or supplement relating solely to the activity of any Agent or Agents)
which, in the reasonable judgment of the Agents, shall materially impair the
marketability of the Bonds.
(d) GPSC Order. That an appropriate order or orders of the
Georgia Public Service Commission necessary to permit the issue and sale of the
Notes shall be in effect; and that no stop order with respect to the
effectiveness of the Registration Statement shall have been issued under the
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<PAGE>
Act by the Commission or proceedings therefor initiated or threatened.
(e) Material Adverse Change. That there shall have been no
material adverse change in the business, properties or financial condition of
the Company from that set forth in or contemplated by the Prospectus, and that
the Company shall as of the Closing Date have delivered to the Agents a
certificate to such effect of an executive officer of the Company. For the
purposes of this condition, the sale by the Company of, or its failure to sell,
any issue of other securities shall not be deemed to be such a change.
(f) Rule 52 Exemption. That, as of the Closing Date, the
Agents shall be furnished a certificate of the Company, which shall be
satisfactory in form and substance to Dewey Ballantine, evidencing compliance
with the provisions of Rule 52 under the Public Utility Holding Company Act of
1935, as amended, in connection with the issue and sale of the Notes.
(g) Company's Obligations. That the Company
shall have performed such of its obligations when and as
provided under this agreement.
(h) No Suspension of Sale of the Notes. That no order
suspending the sale of the Notes in any jurisdiction designated by the Agents
pursuant to Section 3(g) hereof shall have been issued, and no proceeding for
that purpose shall have been initiated or threatened.
(i) No Material Omissions or Untrue Statements. That the
Agents shall not have discovered and disclosed to the Company that the
Registration Statement or any Prospectus contains an untrue statement of a fact
which, in the opinion of Dewey Ballantine, is material or omits to state a fact
which, in the opinion of such counsel, is material and is required to be stated
therein or is necessary to make the statements therein not misleading.
(j) Officers' Certificate. That the Company shall have
furnished to the Agents on the Closing Date a certificate, dated the Closing
Date and addressed to the Agents, of an officer of the Company stating that the
representations and warranties of the Company herein are true and correct at and
as of the Closing Date; that the Company complied with all of its obligations
hereunder to be performed at or prior to the Closing Date; and that the
conditions set forth in Sections 4(d), 4(g) and 4(h) hereof have been fulfilled;
such certificate to be based upon knowledge or belief as to proceedings
initiated or threatened referred to in Sections 4(d) and 4(h).
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(k) Other Information and Documentation. That
prior to the Closing Date, the Company shall have furnished
to the Agents such further information, certificates and
documents as the Agents or Dewey Ballantine may reasonably
request.
(l) Additional Conditions. That there shall not have occurred
the following events: (i) trading in securities on the New York Stock Exchange
shall have been generally suspended; (ii) minimum or maximum ranges for prices
shall have been generally established on the New York Stock Exchange by the
Commission or by the New York Stock Exchange; (iii) a general banking moratorium
shall have been declared by federal or New York State authorities; (iv) any
outbreak or escalation of major hostilities in which the United States is
involved, any declaration of war by the United States Congress or any other
substantial national or international calamity or emergency affecting the United
States shall have occurred in any such case provided for in clause (i) through
(iv) with the result that, in the judgment of the Agents, it would be
impractical or inadvisable to proceed with the solicitation of offers to
purchase Notes or the purchase of Notes from the Company as principal pursuant
to the applicable Purchase Agreement, as the case may be.
(m) Delivery of Other Documents. That the Company shall
furnish to the Agents one copy, certified by an officer of the Company, of each
Registration Statement as initially filed with the Commission, all amendments
thereto and all documents incorporated by reference in the Prospectus pursuant
to Item 12 of Form S-3 as of the time of purchase (in each case, exclusive of
exhibits);
All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if they are in the form and substance satisfactory to
Dewey Ballantine. The delivery of Dewey Ballantine's opinion on the Closing Date
shall be evidence of Dewey Ballantine's satisfaction regarding compliance with
such provisions.
SECTION 5. Additional Covenants of the Company.
The Company covenants and agrees that:
(a) Acceptance of Offer Affirms Representations and
Warranties. Each acceptance by the Company of an offer for the purchase of Notes
shall be deemed to be an affirmation that the representations and warranties of
the Company contained in this Agreement and in any certificate theretofore given
to the Agents pursuant hereto are true and correct at the time of such
acceptance, and an undertaking
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<PAGE>
that such representations and warranties will be true and correct at the time of
delivery to the purchaser or his agent of the Notes relating to such acceptance
as though made at and as of each such time (and it is understood that such
representations and warranties shall relate to the Registration Statement and
the Prospectus as amended or supplemented to each such time).
(b) Subsequent Delivery of Officers' Certificates. Each time
that the Registration Statement or the Prospectus shall be amended or
supplemented (other than by an amendment or supplement providing solely for the
interest rates or maturities of the Notes or the principal amount of Notes
remaining to be sold or other changes as agreed to by the Agents on a
case-by-case basis) or the Company files with the Commission any document
incorporated by reference into the Prospectus, the Company shall, concurrently
with such amendment, supplement or filing, furnish the Agents with a certificate
of an officer of the Company in form satisfactory to the Agents to the effect
that the statements contained in the certificate referred to in Section 4(j)
hereof which was last furnished to the Agents are true and correct at the time
of such amendment, supplement or filing, as the case may be, as though made at
and as of such time (except that such statements shall be deemed to relate to
the Registration Statement and the Prospectus as amended and supplemented to
such time) or, in lieu of such certificate, a certificate of the same tenor as
the certificate referred to in said Section 4(j), modified as necessary to
relate to the Registration Statement and the Prospectus as amended and
supplemented to the time of delivery of such certificate.
(c) Subsequent Delivery of Legal Opinions. Each
-------------------------------------
time that the Registration Statement or the Prospectus shall
be amended or supplemented (other than by an amendment or
supplement providing solely for the interest rates or
maturities of the Notes or the principal amount of the Notes
remaining to be sold or other changes as agreed to by the
Agents on a case-by-case basis) or the Company files with
the Commission any document incorporated by reference into
the Prospectus, the Company shall, concurrently with such
amendment, supplement or filing, furnish the Agents and
Dewey Ballantine with a written opinion of the counsel to
the Company specified in Section 4(b)(1), addressed to the
Agents and dated the date of delivery of such opinion, in
form satisfactory to the Agents, of the same tenor as the
opinion referred to in Exhibit 1, but modified as necessary
to relate to the Registration Statement and the Prospectus
as amended or supplemented to the time of delivery of such
opinion; provided, however, that in lieu of such opinion,
-------- -------
such counsel may furnish the Agents with a letter to the
effect that the Agents may rely on such prior opinion to the
14
<PAGE>
same extent as though it were dated the date of such letter authorizing reliance
(except that statements in such prior opinion shall be deemed to relate to the
Registration Statement and the Prospectus as amended or supplemented to the time
of delivery of such letter authorizing reliance).
(d) Subsequent Accountant's Letter. Each time that the
Registration Statement or the Prospectus shall be amended or supplemented to
include additional financial statements or the Company files with the Commission
any document incorporated by reference into the Prospectus which contains
additional financial statements, the Company shall cause Arthur Andersen LLP to
furnish the Agents, concurrently with such amendment, supplement or filing, a
letter, addressed jointly to the Company and the Agents and dated the date of
delivery of such letter, in form and substance reasonably satisfactory to the
Agents, of the same tenor as the letter referred to in Section 4(b)(3) hereof
but modified to relate to the Registration Statement and the Prospectus, as
amended and supplemented to the date of such letter, with such changes as may be
necessary to reflect changes in the financial statements and other information
derived from the accounting records of the Company; provided, however, that if
the Registration Statement or the Prospectus is amended or supplemented solely
to include financial information as of and for a fiscal quarter or the Company
files with the Commission any document incorporated by reference into the
Prospectus which contains only additional financial statements as of and for a
fiscal quarter, Arthur Andersen LLP may limit the scope of such letter to the
unaudited financial statements included in such amendment, supplement or filing.
(e) On any settlement date for the sale of Notes, the Company
shall furnish to the Agent that solicited or received the offer to purchase any
Notes being delivered on such settlement date, if requested by such Agent prior
to acceptance of such offer by the Company, a written opinion of the counsel to
the Company set forth in Section 4(b)(1), dated such settlement date, in form
satisfactory to such Agent, to the effect set forth in Exhibit A hereof, but
modified, as necessary, to relate to the Prospectus relating to the Notes to be
delivered on such settlement date; provided, however, that in lieu of such
opinion, such counsel may furnish the Agent with a letter to the effect that the
Agent may rely on such prior opinion to the same extent as though it was dated
such settlement date (except that statements in such prior opinion shall be
deemed to relate to the Registration Statement and such Prospectus as amended or
supplemented to the time of delivery of such letter authorizing reliance.)
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SECTION 6. Indemnification.
(a) The Company agrees to indemnify and hold harmless each
Agent and each person, if any, who controls any Agent within the meaning of
Section 15 of the Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become subject,
under the Act, or otherwise, and to reimburse the Agents and such controlling
person or persons, if any, for any legal or other expenses incurred by them in
connection with defending any actions, insofar as such losses, claims, damages,
liabilities or actions arise out of, or are based upon, any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or the Prospectus, or, if the Company shall furnish to the Agents any
amendments or any supplements to the Prospectus, or shall make any filings
pursuant to Section 13 or 14 of the Exchange Act which are incorporated therein
by reference, in the Prospectus as so amended or supplemented, or arise out of,
or are based upon, any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, except insofar as such losses, claims, damages, liabilities or
actions arise out of, or are based upon, any such untrue statement or alleged
untrue statement or omission or alleged omission made in the Registration
Statement or the Prospectus in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such Agents specifically
for inclusion therein and except that this indemnity with respect to the
Prospectus, if the Company shall have furnished any amendment or supplement
thereto, shall not inure to the benefit of any Agent (or any person controlling
such Agent) on account of any losses, claims, damages, liabilities or actions
arising from the sale of the Notes to any person if a copy of the Prospectus
(exclusive of documents incorporated by reference pursuant to Item 12 of Form
S-3), as the same may then be amended or supplemented, shall not have been sent
or given by or on behalf of such Agent to such person with or prior to the
written confirmation of the sale involved and the untrue statement or alleged
untrue statement or omission or alleged omission was corrected in the Prospectus
as supplemented or amended at the time of such confirmation. Each Agent agrees,
within ten days after the receipt by it of notice of the commencement of any
action in respect of which indemnity may be sought by it, or by any person
controlling it, from the Company on account of its agreement contained in this
Section 6(a), to notify the Company in writing of the commencement thereof, but
the omission of such Agent so to notify the Company of any such action shall not
release the Company from any liability which it may have to such Agent or to
such controlling person otherwise than on account of the indemnity agreement
contained in this Section 6(a). In
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case any such action shall be brought against any Agent or any such person
controlling such Agent and such Agent shall notify the Company of the
commencement thereof, as above provided, the Company shall be entitled to
participate in (and, to the extent that it shall wish, including the selection
of counsel, to direct) the defense thereof at its own expense. In case the
Company elects to direct such defense and select such counsel, any Agent or
controlling person shall have the right to employ its own counsel, but, in any
such case, the fees and expenses of such counsel shall be at the expense of such
Agent or controlling person unless the employment of such counsel has been
authorized in writing by the Company in connection with defending such action.
The Company's indemnity agreement contained in this Section
6(a), and its covenants, warranties and representations contained in this
agreement, shall remain in full force and effect regardless of any investigation
made by or on behalf of any Agent or controlling person, and shall survive the
delivery of and payment for the Notes hereunder.
(b) Each Agent agrees to indemnify and hold harmless the
Company, its directors and such of its officers who signed the Registration
Statement and each other Agent and each person, if any, who controls the Company
or any such other Agent within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, to the same extent and upon the same terms as the
indemnity agreement of the Company set forth in Section 6(a) hereof, but only
with respect to untrue statements or omissions or alleged untrue statements or
omissions of a material fact contained in the Registration Statement or the
Prospectus, but in each case only to the extent that the untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company by such
Agent specifically for inclusion therein.
The indemnity agreement on the part of each Agent contained in
this Section 6(b), and the warranties and representations of such Agent
contained in this agreement, shall remain in full force and effect regardless of
any investigation made by or on behalf of the Company or other Agent or
controlling person, and shall survive the delivery of and payment for the Notes
hereunder.
SECTION 7. Status of each Agent.
In soliciting offers to purchase the Notes from the Company
pursuant to this Agreement (other than offers to purchase pursuant to Section
10) each Agent is acting solely
17
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as agent for the Company and not as principal. Each Agent will make reasonable
efforts to assist the Company in obtaining performance by each purchaser whose
offer to purchase Notes from the Company has been solicited by such Agent and
accepted by the Company but such Agent shall have no liability to the Company in
the event any such purchase is not consummated for any reason. If the Company
shall default in its obligations to deliver Notes to a purchaser whose offer it
has accepted, the Company shall (i) hold each Agent harmless against any loss,
claim or damage arising from or as a result of such default by the Company and
(ii) in particular pay to each Agent any commission to which it would be
entitled in connection with such sale.
SECTION 8. Representations and Warranties to
Survive Delivery.
All representations and warranties of the Company contained in
this Agreement, or contained in certificates of officers of the Company
submitted pursuant hereto, shall remain operative and in full force and effect,
regardless of the termination or cancellation of this Agreement or any
investigation made by or on behalf of any Agent or any person controlling such
Agent or by or on behalf of the Company, and shall survive each delivery of and
payment for any of the Notes.
SECTION 9. Termination.
This Agreement may be terminated for any reason with respect
to any party hereto, at any time, by any party hereto upon the giving of one
day's written notice of such termination to the other parties hereto; provided,
however, that in case of termination by less than all Agents such termination
shall be effective only with respect to such terminating Agent. If, at the time
of termination, an offer to purchase any of the Notes has been accepted by the
Company but the time of delivery to the purchaser has not occurred, the
provisions of Sections 3(b), 3(e), 3(g) and 3(j) shall remain in effect until
such Notes are delivered. The provisions of Sections 3(d), 3(f), 3(h), 6, 7, 8,
11, 12, 13 and 14 hereof shall survive any such termination.
SECTION 10. Purchases as Principal.
(a) From time to time any Agent may agree with the Company to
purchase Notes from the Company as principal, in which case such purchase shall
be made in accordance with the terms of a separate agreement (a "Purchase
Agreement") to be entered into between such Agent and the Company in the form
attached hereto as Exhibit E. A Purchase Agreement, to the extent set forth
therein, may incorporate by reference specified provisions of this Agreement.
Each Purchase
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Agreement shall be substantially in the form of Exhibit E hereto but may take
the form of (i) an exchange of any form of written telecommunication between the
Agent and the Company or (ii) an oral agreement with an authorized officer of
the Company promptly confirmed in writing. The Agent's commitment to purchase
Notes as principal shall be deemed to have been made on the basis of the
representations and warranties of the Company herein contained and shall be
subject to the terms and conditions herein set forth as well as any other
representations, warranties, terms and conditions set forth in the Purchase
Agreement.
(b) Unless otherwise agreed to between the Company and an
Agent in a Purchase Agreement, any Note sold to an Agent as principal (i) shall
be purchased by such Agent at a price equal to 100% of the principal amount
thereof less a percentage equal to the commission applicable to an agency sale
of a Note of identical maturity and (ii) may be resold by such Agent at varying
prices from time to time or, if set forth in the applicable Purchase Agreement
and Pricing Supplement, at a fixed public offering price. In connection with any
resale of Notes purchased, any such Agent may use a selling or dealer group and
may reallow to any broker or dealer any portion of the discount or commission
payable pursuant hereto.
SECTION 11. Notices.
Except as otherwise provided herein, all notices and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if mailed or transmitted by any standard form of telecommunication.
Notices to the Agents shall be directed to each of them as follows:
Lehman Brothers Inc.
3 World Financial Center, 12th Floor
New York, New York 10285-1200
Attention: Medium Term Note Department
Telephone: (212) 528-1718
Facsimile: (212) 526-2040
Donaldson, Lufkin & Jenrette Securities
Corporation
140 Broadway - 40th Floor
New York, New York 10005-1285
Attention: Corporate Bond Syndicate/MTNs
Telephone: (212) 504-4807
Facsimile: (212) 504-4298
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<PAGE>
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260-0060
Attention: Medium-Term Note Desk - 3rd Floor
Telephone: (212) 648-0591
Facsimile: (212) 648-5907
Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Attention: Medium-Term Note Group
Telephone: (212) 783-6848
Facsimile: (212) 783-2274
Smith Barney Inc.
390 Greenwich Street
New York, New York 10013
Attention: Mark Meyer, MTN Product Manager
Telephone: (212) 723-5123
Facsimile: (212) 723-8553
Notices to the Company shall be directed to it as follows:
Georgia Power Company, 333 Piedmont Avenue, N.E., Atlanta,
Georgia 30308, Attention: Treasurer, with a copy to
Southern Company Services, Inc., 64 Perimeter Center East,
Atlanta, Georgia 30346, Attention: Corporate Finance
Department.
SECTION 12. Binding Effect; Benefits.
This Agreement shall be binding upon each Agent, the Company,
and their respective successors. This Agreement and the terms and provisions
hereof are for the sole benefit of only those persons, except that (a) the
representations, warranties, indemnities and agreements of the Company contained
in this Agreement shall also be deemed to be for the benefit of the person or
persons, if any, who control any Agent within the meaning of Section 15 of the
Act, (b) the agreements of the Agents contained in Section 6 hereof shall be
deemed to be for the benefit of directors of the Company, officers of the
Company who have signed the Registration Statement and any person controlling
the Company and (c) to the extent any person who has agreed to purchase Notes
may be relieved of his obligation to make payment thereof and take delivery
thereof pursuant to the first paragraph of Section 4 hereof. Nothing in this
Agreement is intended or shall be construed to give any person, other than the
persons referred to in this Section, any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision contained herein.
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SECTION 13. Governing Law; Counterparts.
This Agreement shall be governed by and construed in
accordance with the laws of Georgia. This Agreement may be executed in
counterparts and the executed counterparts shall together constitute a single
instrument.
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SECTION 14. Paragraph Headings.
The paragraph headings used in this Distribution Agreement are
for convenience of reference only, and are not to affect the construction hereof
or be taken into consideration in the interpretation hereof.
If the foregoing correctly sets forth our agreement, please
indicate your acceptance hereof in the space provided for that purpose below.
Very truly yours,
GEORGIA POWER COMPANY
By______________________________
Name:
Title:
CONFIRMED AND ACCEPTED, as of the date first above written:
LEHMAN BROTHERS INC. SMITH BARNEY INC.
By________________________ By_______________________
Name: Name:
Title: Title:
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By________________________
Name:
Title:
J.P. MORGAN SECURITIES INC.
By________________________
Name:
Title:
SALOMON BROTHERS INC
By________________________
Name:
Title:
22
<PAGE>
EXHIBIT A
[Letterhead of Troutman Sanders LLP]
[Date]
Lehman Brothers
Lehman Brothers Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
J.P. Morgan Securities Inc.
Salomon Brothers Inc
Smith Barney Inc.
c/o Lehman Brothers Inc.
3 World Financial Center, 12th Floor
New York, New York 10285-1200
Dear Sirs:
We have acted as counsel to Georgia Power Company (the
"Company") in connection with your agreement to act as agents to solicit offers
to purchase up to $300,000,000 aggregate principal amount of First Mortgage
Bonds, Secured Medium-Term Notes (the "Notes") of the Company, pursuant to the
Distribution Agreement dated November, 1995 (the "Agreement") among the Company
and you. The Notes are to be issued under the Indenture dated as of March 1,
1941, between the Company and Chemical Bank, as trustee (the "Trustee"), as
supplemented and amended by various indentures supplemental thereto (said
Indenture, as so supplemented and amended, being hereinafter called the
"Indenture").
We have examined the Registration Statements on Form S-3 (File
Nos. 33-60345 and 33-49661) filed by the Company under the Securities Act of
1933, as amended (the "Act"), as each became effective under the Act (the
"Registration Statements"); the Company's prospectus dated _____________, as
supplemented by the prospectus supplement dated ____________ and by any pricing
supplement (the "Prospectus"), filed by the Company pursuant to Rule 424 of the
rules and regulations of the Securities and Exchange Commission (the
"Commission") under the Act, which pursuant to Form S-3 incorporates by
reference the Annual Report on Form 10-K of the Company for the fiscal year
ended December 31, ___, the Quarterly Reports on Form 10-Q of the Company for
the quarters ended __________________ and the Current Reports on Form 8-K of the
Company dated __________________ (the "Exchange Act Documents"), each as filed
under the
A-1
<PAGE>
Securities Exchange Act of 1934, as amended (the "Exchange Act"); the Agreement;
and the Indenture. In addition, we have examined, and have relied as to matters
of fact upon, the documents delivered to you on the date hereof, and we have
made such other and further investigations as we deemed necessary to enable us
to express the opinions hereinafter set forth.
In such examination, we have assumed the genuineness of all
signatures, the legal capacity of natural persons, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified or photostatic copies, and the
authenticity of the originals of such latter documents.
Based upon the foregoing, and subject to the qualifications
and limitations stated herein, we hereby advise you that in our opinion:
1. The Company has been duly incorporated and is validly
existing and in good standing as a corporation under the laws of the
State of Georgia and has due corporate authority to carry on the public
utility business in which it is engaged and to own and operate the
properties used by it in such business.
2. The Indenture has been duly authorized, executed and
delivered by the Company and duly qualified under the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"), and, assuming due
authorization, execution and delivery thereof by the Trustee,
constitutes a valid and legally binding instrument of the Company
enforceable in accordance with its terms, subject to the qualifications
that the enforceability of the Company's obligations under the
Indenture and the Notes may be limited by (a) laws of the State of
Georgia, where property covered thereby is located, affecting the
remedies for the enforcement of the security provided for in the
Indenture, which laws do not, in our opinion, make inadequate the
remedies necessary for the realization of the benefits of such
security, (b) laws of the States of Alabama, South Carolina and
Tennessee and of the District of Columbia, where property covered
thereby is located, affecting the remedies for the enforcement of the
security provided for in the Indenture, as to which laws we express no
opinion, (c) bankruptcy, insolvency, reorganization, moratorium and
other laws relating to or affecting creditors' rights generally and (d)
general principles of equity.
A-2
<PAGE>
3. The Indenture (other than the Supplemental Indenture dated
as of _________, which is in proper form for recordation) has been duly
recorded in all counties in which the property specifically described
therein is located and the Indenture is effective to create the lien
intended to be created thereby.
4. The Notes have been duly authorized by the Company, and
when the terms of the Notes and of their issue and sale have been duly
established in accordance with the Indenture, the Agreement and the
aforesaid authorization so as not to violate any applicable law,
regulation, order of any regulatory body or agreement or instrument
then binding on the Company, and when the Notes have been duly executed
by the Company and duly authenticated by the Trustee in accordance with
the provisions of the Indenture and the aforesaid authorization and
upon payment and delivery in accordance with the Agreement and subject
to the qualifications set forth in paragraph 2 above, the Notes will
constitute valid and legally binding obligations of the Company
enforceable in accordance with their terms and entitled to the benefits
and security of the Indenture equally and ratably with the first
mortgage bonds of the other series presently outstanding under the
Indenture.
5. The statements made in the Prospectus under the captions
"Description of Notes" and "Description of New Bonds", insofar as they
purport to constitute summaries of the terms of documents referred to
therein, constitute accurate summaries of the terms of such documents
in all material respects, and the summary of certain federal income tax
consequences of ownership of the Notes appearing in the Prospectus
under the caption "Certain United States Federal Income Tax
Consequences", insofar as it purports to summarize certain federal
income tax consequences, is an accurate summary in all material
respects.
6. All orders, consents or other authorizations or approvals
of the Georgia Public Service Commission legally required for the
issuance of the Notes have been obtained; and no other order, consent
or other authorization or approval of any governmental body (other than
in connection or in compliance with the provisions of the securities or
"blue sky" laws of any jurisdiction, as to which we express no opinion)
is legally required for the issuance of the Notes by the Company.
7. The Agreement has been duly authorized,
executed and delivered by the Company.
A-3
<PAGE>
8. Except as otherwise stated under "Item 2- Properties" in
the Annual Report on Form 10-K of the Company for the fiscal year ended
December 31, ____, the Company has good and marketable title in fee
simple to the Company's interests in the principal plants and other
important units of the Company's property therein described, and the
Indenture constitutes, as security for the Notes, a direct first lien
on substantially all the fixed property and franchises owned by the
Company, used and useful in its public utility business, subject only
to excepted encumbrances, as therein defined, and upon the acquisition
hereafter by the Company of similar property in the State of Georgia,
will create such lien thereon, subject to liens existing thereon at the
time of acquisition and to the due recordation of the Indenture in the
counties in which such property is located, and except as may be
limited by bankruptcy, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors' rights generally and general
principles of equity.
Our opinion set forth in paragraph 3 above with respect to the
recordation of the Indenture is based solely and without independent
verification on information furnished to us by the Company.
We have not independently verified the accuracy, completeness
or fairness of the statements made or included in the Registration Statements,
the Prospectus or the Exchange Act Documents and take no responsibility
therefor, except as and to the extent set forth in paragraph 5 above and in the
Prospectus in the third paragraph under the caption "Legal Opinions and
Experts". In the course of the preparation by the Company of the Registration
Statements, the Prospectus and the Exchange Act Documents, we participated in
conferences with certain officers and employees of the Company and with
representatives of Arthur Andersen LLP. Based upon our examination of the
Registration Statements, the Prospectus and the Exchange Act Documents, our
investigations made in connection with the preparation of the Registration
Statements, the Prospectus and the Exchange Act Documents and our participation
in the conferences referred to above, (i) we are of the opinion that
Registration Statements, as of their respective effective dates, and the
Prospectus, as of _____________, complied as to form in all material respects
with the requirements of the Act, the Trust Indenture Act and the applicable
rules and regulations of the Commission thereunder and that the Exchange Act
Documents, as of their respective dates of filing with the Commission, complied
as to form in all material respects with the relevant requirements of the
Exchange Act and the applicable rules and regulations of the Commission
thereunder, except that in
A-4
<PAGE>
each case we express no opinion as to the financial statements or other
financial or statistical data contained or incorporated by reference in the
Registration Statements, the Prospectus or the Exchange Act Documents, and (ii)
we have no reason to believe that the Registration Statements, as of the date of
filing with the Commission of the Annual Report on Form 10-K of the Company for
the fiscal year ended December 31, 1994 (including such Annual Report on Form
10- K) in the case of the Registration Statement in File No. 33- 49661 and as of
its effective date (including the Exchange Act Documents on file with the
Commission as of such date) in the case of the Registration Statement in File
No. 33- 60345, contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary in order to
make the statements therein not misleading, or that the Prospectus (including
the Exchange Act Documents) contains any untrue statement of a material fact or
omits to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except that in each case we express no opinion or belief with
respect to the financial statements or other financial or statistical data
contained or incorporated by reference in the Registration Statements, the
Prospectus or the Exchange Act Documents.
We are members of the State Bar of Georgia and we do not
express any opinion herein concerning any law other than the law of the State of
Georgia and the federal law of the United States.
This opinion is rendered to you in connection with the above
described transactions. This opinion may not be relied upon by you for any other
purpose, or relied upon by, or furnished to, any other person, firm or
corporation without our prior written consent.
Very truly yours,
TROUTMAN SANDERS LLP
A-5
<PAGE>
EXHIBIT B
[Letterhead of Dewey Ballantine]
[Date]
Lehman Brothers
Lehman Brothers, Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
J.P. Morgan Securities Inc.
Salomon Brothers Inc
Smith Barney Inc.
c/o Lehman Brothers Inc.
3 World Financial Center, 12th Floor
New York, New York 10285-1200
Dear Sirs:
We have acted as your counsel in connection with your
agreement to act as agents to use your reasonable best efforts to solicit offers
to purchase up to $300,000,000 aggregate principal amount of First Mortgage
Bonds, Secured Medium Term Notes (the "Notes") of Georgia Power Company (the
"Company") pursuant to the Distribution Agreement dated _______________, 1995
(the "Agreement") among the Company and you. The Notes are to be issued under
the Indenture dated as of March 1, 1941, between the Company and Chemical Bank,
as Trustee (the "Trustee"), as supplemented and amended by various indentures
supplemental thereto (said Indenture, as so supplemented and amended, being
hereinafter called the "Indenture").
We have examined the Registration Statements on Form S-3 (File
Nos. 33-60345 and 33-49661) filed by the Company under the Securities Act of
1933, as amended (the "Act"), as each became effective under the Act (the
"Registration Statements"); the Company's prospectus dated ______________, as
supplemented by the prospectus supplement dated _______________ and by any
pricing supplement (the "Prospectus"), filed by the Company pursuant to Rule 424
of the rules and regulations of the Securities and Exchange Commission (the
"Commission") under the Act, which pursuant to Form S-3 incorporates by
reference the Annual Report on Form 10-K of the Company for the fiscal year
ended December 31, ____, the Quarterly Reports on Form 10-Q of the Company for
the quarters ended ________________________ and the Current Reports on Form 8-K
of the Company dated _________________ (the "Exchange Act Documents"), each as
filed under the Securities Exchange Act of 1934, as amended
B-1
<PAGE>
(the "Exchange Act"); the Agreement; and the Indenture. In addition, we have
examined, and have relied as to matters of fact upon, the documents delivered to
you on the date hereof, and we have made such other and further investigations
as we deemed necessary to enable us to express the opinions hereinafter set
forth.
In such examination, we have assumed the genuineness of all
signatures, the legal capacity of natural persons, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified or photostatic copies, and the
authenticity of the originals of such latter documents.
Based upon the foregoing, and subject to the qualifications
and limitations stated herein, we hereby advise you that in our opinion:
1. The Company has been duly incorporated and is validly
existing and in good standing as a corporation under the laws of the
State of Georgia and has due corporate authority to carry on the public
utility business in which it is engaged and to own and operate the
properties used by it in such business.
2. The Indenture has been duly authorized, executed and
delivered by the Company and duly qualified under the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"), and, assuming due
authorization, execution and delivery thereof by the Trustee,
constitutes a valid and legally binding instrument of the Company
enforceable in accordance with its terms, subject to the qualifications
that the enforceability of the Company's obligations under the
Indenture and the Notes may be limited by (a) laws of the State of
Georgia, where property covered thereby is located, affecting the
remedies for the enforcement of the security provided for in the
Indenture, which laws do not, in our opinion, make inadequate the
remedies necessary for the realization of the benefits of such
security, (b) laws of the States of Alabama, South Carolina and
Tennessee and of the District of Columbia, where property covered
thereby is located, affecting the remedies for the enforcement of the
security provided for in the Indenture, as to which laws we express no
opinion, (c) bankruptcy, insolvency, reorganization, moratorium and
other laws relating to or affecting creditors' rights generally and (d)
general principles of equity.
3. The Notes have been duly authorized by the
Company and, when the terms of the Notes and of their
B-2
<PAGE>
issue and sale have been duly established in accordance with the
Indenture, the Agreement and the aforesaid authorization so as not to
violate any applicable law, regulation, order of any regulatory body or
agreement or instrument then binding on the Company, and when the Notes
have been duly executed by the Company and duly authenticated by the
Trustee in accordance with the provisions of the Indenture and the
aforesaid authorization and upon payment and delivery in accordance
with the Agreement and subject to the qualifications set forth in
paragraph 2 above, the Notes will constitute valid and legally binding
obligations of the Company enforceable in accordance with their terms
and entitled to the benefits and security of the Indenture equally and
ratably with the first mortgage bonds of the other series presently
outstanding under the Indenture.
4. The statements made in the Prospectus under the captions
"Description of Notes" and "Description of New Bonds", insofar as they
purport to constitute summaries of the terms of documents referred to
therein, constitute accurate summaries of the terms of such documents
in all material respects.
5. All orders, consents or other authorizations or approvals
of the Georgia Public Service Commission legally required for the
issuance of the Notes have been obtained; and no other order, consent
or other authorization or approval of any governmental body (other than
in connection or in compliance with the provisions of the securities or
"blue sky" laws of any jurisdiction, as to which we express no opinion)
is legally required for the issuance of the Notes by the Company.
6. The Agreement has been duly authorized,
executed and delivered by the Company.
All legal proceedings taken by the Company in connection with
the authorization and delivery of the Notes, and the legal opinion, dated the
date hereof rendered to you by Troutman Sanders LLP, counsel for the Company,
pursuant to the Agreement, are in form satisfactory to us. Insofar as the
opinions expressed herein relate to or are dependent upon matters governed by
the laws of the State of Georgia, we have relied upon the aforesaid opinion of
Troutman Sanders LLP.
We are not passing upon matters relating to the lien of the
Indenture on property now owned or hereafter acquired by the Company, the
recordation or filing of the Indenture or any related financing statements, the
title of
B-3
<PAGE>
the Company to its properties or the franchises of the Company. As to certain of
such matters there is being furnished to you the above-mentioned opinion of
Troutman Sanders LLP.
We have not independently verified the accuracy, completeness
or fairness of the statements made or included in the Registration Statements,
the Prospectus or the Exchange Act Documents and take no responsibility
therefor, except as and to the extent set forth in paragraph 4 above. In the
course of the preparation by the Company of the Registration Statements, the
Prospectus and the Exchange Act Documents, we participated in conferences with
certain officers and employees of the Company, with representatives of Arthur
Andersen LLP and with counsel for the Company. Based upon our examination of the
Registration Statements, the Prospectus and the Exchange Act Documents, our
investigations made in connection with the preparation of the Registration
Statements and the Prospectus and our participation in the conferences referred
to above, (i) we are of the opinion that the Registration Statements, as of
their respective effective dates, and the Prospectus, as of ____________,
complied as to form in all material respects with the requirements of the Act,
the Trust Indenture Act and the applicable rules and regulations of the
Commission thereunder and that the Exchange Act Documents, as of their
respective dates of filing with the Commission, complied as to form in all
material respects with the relevant requirements of the Exchange Act and the
applicable rules and regulations of the Commission thereunder, except that in
each case we express no opinion as to the financial statements or other
financial or statistical data contained or incorporated by reference in the
Registration Statements, the Prospectus or the Exchange Act Documents, and (ii)
we have no reason to believe that the Registration Statements, as of the date of
filing with the Commission of the Annual Report on Form 10-K of the Company for
the fiscal year ended December 31, 1994 (including such Annual Report on Form
10- K) in the case of the Registration Statement in File No. 33- 49661 and as of
its effective date (including the Exchange Act Documents on file with the
Commission as of such date) in the case of Registration Statement in File No.
33-60345, contained any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary in order to make
the statements therein not misleading, or that the Prospectus (including the
Exchange Act Documents) contains any untrue statement of a material fact or
omits to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except that in each case we express no opinion or belief with
respect to the financial statements or other financial or statistical data
contained or incorporated by reference
B-4
<PAGE>
in the Registration Statement, the Prospectus or the
Exchange Act Documents.
We are members of the Bar of the State of New York and we do
not express any opinion herein concerning any law other than the law of the
State of New York and the federal law of the United States and, to the extent
set forth herein, the laws of the State of Georgia.
This opinion is rendered to you in connection with the above
described transactions. This opinion may not be relied upon by you for any other
purpose, or relied upon by, or furnished to, any other person, firm or
corporation without our prior written consent.
Very truly yours,
DEWEY BALLANTINE
B-5
<PAGE>
EXHIBIT C
Georgia Power Company
First Mortgage Bonds
Secured Medium-Term Notes
Schedule of Payments
The Company agrees to pay each Agent a commission equal to the
following percentage of the aggregate principal amount of Notes:
Term Commission Rate
1 year to less than 18 months .150%
18 months to less than 2 years .200%
2 years to less than 3 years .250%
3 years to less than 4 years .350%
4 years to less than 5 years .450%
5 years to less than 6 years .500%
6 years to less than 7 years .550%
7 years to less than 10 years .600%
10 years to less than 15 years .625%
15 years to less than 20 years .700%
20 years to less than 30 years .750%
30 years to up to and including To be determined
40 years at time of sale
C-1
<PAGE>
EXHIBIT D
Georgia Power Company
First Mortgage Bonds
Secured Medium-Term Notes
Administrative Procedures
First Mortgage Bonds, Secured Medium-Term Notes, due from one
to 40 years from date of issue (the "Notes") may be offered on a continuing
basis by Georgia Power Company (the "Company"). Lehman Brothers Inc., Donaldson,
Lufkin & Jenrette Securities Corporation, J.P. Morgan Securities Inc., Salomon
Brothers Inc and Smith Barney Inc., each acting as agent (each an "Agent" and
collectively, the "Agents"), have each agreed to use their reasonable best
efforts to solicit offers to purchase the Notes. The Notes are being sold
pursuant to a Distribution Agreement between the Company and the Agents dated
November 29, 1995 (as it may be supplemented or amended from time to time, the
"Distribution Agreement") to which these administrative procedures are attached
as an exhibit. The Notes will be issued pursuant to an Indenture, dated as of
March 1, 1941 (as it may be amended or supplemented from time to time, the
"Indenture"), between the Company and Chemical Bank ("CB"), as trustee (the
"Trustee"). The Notes will rank equally and ratably with the first mortgage
bonds of the other series presently outstanding under the Indenture and have
been registered with the Securities and Exchange Commission (the "Commission").
Unless otherwise noted, terms not defined herein shall have the same meaning as
in the Prospectus Supplement relating to the Notes (the "Prospectus") and in the
Distribution Agreement.
Administrative responsibilities, document control and
record-keeping functions to be performed by the Company will be performed by
Southern Company Services, Inc. ("SCS"). Administrative procedures for the
offering are explained below and shall be applicable to all Notes except as
otherwise provided with respect to Book-Entry Notes under the special
administrative procedures therefor set forth below.
Price to Public
Each Note will be issued at 100% of principal amount, unless
otherwise determined by the Company.
Date of Issuance
Each Note will be dated and issued as of the date of its
authentication by the Trustee.
D-1
<PAGE>
Maturities
Each Note will mature on a Business Day selected by the
initial purchaser and agreed upon by the Company, such date being at least one
year but not more than 40 years from the date of issuance. Each Floating Rate
Note will mature on an Interest Payment Date (as defined below).
Registration
Notes will be issued only in fully registered form as either a
Book-Entry Note or a Certificated Note. Certificated Notes may be presented for
registration of transfer or exchange at the Trustee's New York office.
Denominations
Notes (other than Book-Entry Notes) will be issued and payable
in U.S. dollars in the denomination of $1,000 and integral multiples thereof,
except as otherwise provided in the Pricing Supplement.
Interest Payments
Each Note bearing interest at a fixed rate (a "Fixed Rate
Note") will bear interest from its issue date at the annual rate stated on the
face thereof, payable either semi-annually on December 1 and June 1 or annually
on June 1 of each year except as otherwise provided in the Pricing Supplement
(each an "Interest Payment Date" with respect to such Fixed Rate Note) and at
Maturity.
Special provisions are set forth in a supplement to the
Prospectus relating to Notes bearing interest at a rate or rates determined by
reference to an interest rate formula (the "Floating Rate Notes") stated on the
face thereof, payable in arrears on such dates as are specified therein (each an
"Interest Payment Date" with respect to such Floating Rate Note).
Interest on Fixed Rate Notes will be calculated and paid on
the basis of a 360-day year of twelve 30-day months. Interest will be payable to
the person in whose name such Note is registered at the close of business on
each of November 15 or May 15, or May 15, as the case may be (whether or not a
Business Day) (the "Regular Record Dates") next preceding the respective
Interest Payment Date. Any payment of principal and interest on such Note
required to be paid on an Interest Payment Date or at Maturity which is not a
Business Day shall be postponed to the next day which is a Business Day. The
first payment of interest on any Note originally issued between a Regular Record
Date and an Interest Payment Date will be made on the Interest
D-2
<PAGE>
Payment Date following the next succeeding Regular Record Date. All interest
payments, excluding interest payments made at Maturity, will be made by check
mailed to the person entitled thereto as provided in the supplement to the
Prospectus relating to the Notes, or, at the option of the Company, by wire
transfer to an account maintained by such person with a bank located in the
United States. Notwithstanding the foregoing, the holder of $10 million or more
in aggregate principal amount of Notes with the same Interest Payment Date shall
upon written request to the Trustee on or prior to the related Regular Record
Date be entitled to receive payments of interest (other than at Stated Maturity
or upon redemption) by wire transfers to an account maintained by such holder
with a bank located in the United States.
On the fifth Business Day immediately preceding each Interest
Payment Date, the Trustee (or any duly selected paying agent) will furnish the
Company with the total amount of the interest payments to be made on such
Interest Payment Date (to the extent ascertainable). The Trustee (or any duly
selected paying agent) will provide monthly to the Treasury Department of SCS a
list of the principal and interest (to the extent ascertainable) to be paid on
Notes maturing in the next succeeding month. The Company will provide to the
Trustee (or such paying agent) not later than the payment date sufficient moneys
to pay in full all principal and interest payments due on such payment date. The
Trustee (or such paying agent) will assume responsibility for withholding taxes
on interest payments as required by law.
Acceptance and Rejection of Offers
The Company shall have the sole right to accept offers to
purchase Notes and may reject any such offer in whole or in part. Each Agent
shall promptly communicate to the Company, orally or in writing, each reasonable
offer to purchase Notes from the Company received by it other than those
rejected by such Agent. Each Agent shall have the right, in its discretion
reasonably exercised without advising the Company, to reject any offers in whole
or in part.
Settlement
The receipt of immediately available funds in U.S. dollars by
the Company in the City of New York in payment for a Note (less the applicable
commission) and the authentication and issuance of such Note shall, with respect
to such Note, constitute "Settlement." All offers accepted by the Company will
be settled from one to three Business Days from the date of acceptance by the
Company pursuant to
D-3
<PAGE>
the timetable for Settlement set forth below unless the Company and the
purchaser agree to Settlement on a later date; provided, however, that the
Company will so notify the Trustee of any such later date on or before the
Business Day immediately prior to the Settlement date.
Settlement Procedures for Certificated Notes
In the event of a purchase of Notes by an Agent, as principal,
appropriate Settlement details will be set forth in the applicable Purchase
Agreement to be entered into between such Agent and the Company pursuant to the
Distribution Agreement.
Settlement procedures with regard to each Note sold through
each Agent shall be as follows:
A. Such Agent will advise the Company by telex
or facsimile of the following Settlement information:
1. Exact name in which the Note is to be
registered ("Registered Owner").
2. Exact address of the Registered Owner
and address for payment of principal and
interest, if any.
3. Taxpayer identification number of the
Registered Owner (if available).
4. Principal amount of the Note (and, if
multiple Notes are to be issued,
denominations thereof).
5. Settlement date (Original Issue Date).
6. Stated Maturity.
7. Issue Price.
8. Trade Date.
9. Interest rate:
(a) Fixed Rate Notes:
i) interest rate
ii) overdue rate, if any
(b) Floating Rate Notes:
i) Interest Rate Basis (e.g.,
Commercial Paper Rate)
D-4
<PAGE>
ii) Initial Interest Rate
iii) Spread or Spread Multiplier,
if any
iv) Interest Reset Dates
v) Index Maturity
vi) maximum and minimum interest
rates, if any
vii) overdue rate, if any
10. Interest Payment Date(s) and Interest
Payment Period.
11. Optional Interest Reset Date, if any,
and Subsequent Interest Period, if any.
12. Extension Period, if any, and Final
Maturity Dates, if any.
13. The date on or after which the Notes are
redeemable at the option of the Company
or repurchasable by the Company at the
option of the holder, and additional
redemption or repurchase provisions, if
any.
14. Amortization schedule, if any.
15. Wire transfer information, if
applicable.
16. Agent's Commission (to be paid in the
form of a discount from the proceeds
remitted to the Company upon
Settlement).
17. Whether such Certificated Note is issued at
an original issue discount ("OID"), and, if
so, the total amount of OID, the yield to
maturity and the initial accrual period of
OID.
18. Any other applicable terms required to
complete a Note.
B. The Company will confirm the above Settlement
information to the Trustee by telex, electronic
transmission or facsimile. If the Company rejects an
offer, the Company will promptly notify such Agent by
telephone.
C. The Trustee will assign a Note number to the
transaction and will complete the first page of the
preprinted 4-ply Note packet, the form of which was
D-5
<PAGE>
previously approved by the Company, the Agents and the
Trustee.
D. The Trustee will deliver the Note (with the attached white
confirmation) and the yellow and blue stubs to the Agent. Such Agent
will acknowledge receipt of the Note by completing the yellow stub and
returning it to the Trustee.
E. Such Agent will cause to be wire transferred
to a bank account designated by the Company immediately
available funds in U.S. dollars in the amount of the
principal amount of the Note, less the applicable
commission or discount, if any.
F. Such Agent will deliver the Note (with the attached white
confirmation) to the purchaser against payment in immediately available
funds in the amount of the principal amount of the Note. Such Agent
will deliver to the purchaser a copy of the most recent Prospectus
applicable to the Note with or prior to any written offer of Notes,
delivery of the Note and the confirmation and payment by the purchaser
for the Note.
G. Such Agent will obtain the acknowledgement of
receipt for the Note and Prospectus by the purchaser
through the purchaser's completion of the blue stub.
H. The Trustee will mail the pink stub to the
Treasury Department of SCS.
Settlement Procedures Timetable
For offers accepted by the Company, Settlement procedures "A"
through "H" set forth above shall be completed on or before the respective times
set forth below:
Settlement
Procedure Time (New York)
A 5:00 PM on date of order
B 3:00 PM on the Business Day prior to
Settlement date
C-D 2:15 PM on the Settlement date
E 2:15 PM on the Settlement date
F-G 3:00 PM on the Settlement date
H 5:00 PM on Business Day after the
Settlement date
D-6
<PAGE>
Failure
In the event that a purchaser of a Note shall either fail to
accept delivery of or make payment for such Note on the date fixed by the
Company for Settlement, such Agent will immediately notify the Trustee and the
Treasury Department of SCS by telephone, confirmed in writing, of such failure
and return the Note to the Trustee. Upon the Trustee's receipt of the Note from
the Agent, the Company will promptly return to the Agent an amount of
immediately available funds in U.S. dollars equal to any amount previously
transferred to the Company in respect of the Note pursuant to advances made by
the Agent. Such returns will be made on the Settlement date, if possible, and in
any event not later than 12 noon (New York City time) on the Business Day
following the Settlement date. The Company will reimburse such Agent on an
equitable basis for its loss of the use of the funds during the period when the
funds were credited to the account of the Company. Upon receipt of the Note in
respect of which the default occurred, the Trustee will mark the Note
"cancelled", make appropriate entries in its records and deliver the Note to the
Company with an appropriate debit advice. Such Agent will not be entitled to any
commission with respect to any Note which the purchaser does not accept or make
payment for.
Redemption
Except as otherwise specified in the applicable Pricing
Supplement and on the Notes, the Notes will not be redeemable prior to their
Stated Maturity. If so specified in a Pricing Supplement and on the Note, such
Note will be subject to redemption by the Company, at any time on or after the
date set forth on such supplement and the Note, in whole or from time to time in
part, at the option of the Company, at the redemption price, together with
interest accrued thereon to the date of redemption.
Notices of redemption shall be given by first-class mail
postage prepaid, mailed not less than 30 days nor more than 60 days prior to the
date of redemption, to each holder of Notes to be redeemed, in the manner and in
accordance with the Indenture. In the event of redemption in part of any Note, a
new Note for the amount of the unredeemed portion shall be issued in the name of
the Holder upon cancellation of the redeemed Note.
Maturity
Upon presentation of each Note at Maturity the Trustee (or any
duly appointed Paying Agent) will pay the principal amount thereof, together
with accrued interest through the date of redemption. Such payment shall be made
D-7
<PAGE>
in immediately available funds in U.S. dollars, provided that the Note is
presented to the Trustee (or any such Paying Agent) in time for the Trustee (or
such Paying Agent) to make payments in such funds in accordance with its normal
procedures. The Company will provide the Trustee (and any such Paying Agent)
with funds available for immediate use for such purpose. Notes presented at
Maturity will be cancelled by the Trustee as provided in the Indenture.
Procedures for Establishing the Terms of the Notes
The Company and the Agents will discuss from time to time the
rates to be borne by the Notes that may be sold as a result of the solicitation
of offers by the Agents. Once any Agent has recorded any indication of interest
in Notes upon certain terms and communicated with the Company, if the Company
accepts an offer to purchase Notes upon such terms, the Company will prepare a
Pricing Supplement, in the form previously approved by the Agents, reflecting
the terms of such Notes and, after approval from such Agent, will arrange to
electronically transmit for filing with the Commission under the EDGAR system a
copy of such Pricing Supplement (together with the Prospectus, if amended or
supplemented) and will supply an appropriate number of copies of the Prospectus,
as then amended or supplemented, together with such Pricing Supplement, to the
Agent who presented such offer. See "Delivery of Prospectus." No settlements
with respect to Notes upon such terms may occur prior to such filing and such
Agents will not, prior to such filing, mail confirmations to customers who have
offered to purchase Notes upon such terms. After such filing, sales, mailing of
confirmations and settlements may occur with respect to Notes upon such terms,
subject to the provisions of "Delivery of Prospectus" below.
If the Company decides to post rates and a decision has been
reached to change interest rates, the Company will promptly notify each Agent.
Each Agent will forthwith suspend solicitation of purchases. At that time, the
Agents will recommend and the Company will establish rates to be so "posted".
Following establishment of posted rates and prior to the filing described in the
following sentence, the Agents may only record indications of interest in
purchasing Notes at the posted rates. Once any Agent has recorded any indication
of interest in Notes at the posted rates and communicated with the Company, if
the Company plans to accept an offer at the posted rate, the Company will
prepare a Pricing Supplement reflecting such posted rates and, after approval
from the Agents, will arrange to electronically transmit for filing with the
Commission under the EDGAR system a copy of such Pricing Supplement (together
with the Prospectus if amended or supplemented) and will supply an appropriate
number of copies of the Prospectus, as
D-8
<PAGE>
then amended or supplemented, to the Agent who presented such offer. See
"Delivery of Prospectus." No settlements at the posted rates may occur prior to
such filing and the Agents will not, prior to such filing, mail confirmations to
customers who have offered to purchase Notes at the posted rates. After such
filing, sales, mailing of confirmations and settlements may resume, subject to
the provisions of "Delivery of Prospectus" below.
Suspension of Solicitation; Amendment or Supplement
In the event that at the time the Agents, at the direction of
the Company, suspend solicitation of offers to purchase from the Company there
shall be any orders outstanding which have not been settled, the Company will
promptly advise the Agents and the Trustee whether such orders may be settled
and whether copies of the Prospectus as theretofore amended and/or supplemented
as in effect at the time of the suspension may be delivered in connection with
the settlement of such orders. The Company will have the sole responsibility for
such decision and for any arrangements which may be made in the event that the
Company determines that such orders may not be settled or that copies of such
Prospectus may not be so delivered.
Delivery of Prospectus
A copy of the Prospectus as most recently amended or
supplemented on the date of delivery thereof, together with the applicable
Pricing Supplement, must be delivered to a purchaser prior to or simultaneously
with the earlier of the delivery of (i) the written confirmation of a sale sent
to a purchaser or his agent and (ii) any Note purchased by such purchaser. The
Company shall ensure that the applicable Agent receives copies of the Prospectus
and each amendment or supplement thereto (including the applicable Pricing
Supplement) in such quantities and within such time limits as will enable such
Agent to deliver such confirmation or Note to a purchaser as contemplated by
these procedures and in compliance with the preceding sentence. Copies of
Pricing Supplements should be delivered to:
D-9
<PAGE>
If to Lehman Brothers Inc.:
By facsimile delivery to:
Lehman Brothers Inc.
c/o ADP
Prospectus Services
536 Broad Hollow Road
Melville, New York 11747
Attention: Eric Johnson
Telephone: (516) 254-7106
Facsimile: (516) 249-7492
with a copy by hand to:
Lehman Brothers Inc.
3 World Financial Center, 9th Floor
New York, New York 10285-1200
Attention: Brunnie Vazquez
Telephone: (212) 526-8400
If to Donaldson, Lufkin, Jenrette Securities Corporation:
By facsimile delivery to:
Donaldson, Lufkin & Jenrette
Securities Corporation
140 Broadway - 40th Floor
New York, New York 10005
Attention: Corporate Bond Syndicate/MTNs
Telephone: (212) 504-4807
Facsimile: (212) 504-4298
with a copy by hand to the same.
If to J.P. Morgan Securities Inc.:
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260-0060
Attention: Medium-Term Note Desk - 3rd Floor
If to Salomon Brothers Inc:
Salomon Brothers Inc
8800 Hidden River Parkway
Tampa, Florida 33637
Attention: Enrique Castro
Telephone: (813) 558-7165
Facsimile: (813) 558-4123
D-10
<PAGE>
If to Smith Barney Inc.:
Smith Barney Inc.
Prospectus Department
Brooklyn Army Terminal
140 58th Street - 8th Floor
Brooklyn, NY 11220
with a copy transmitted by telecopy to:
Smith Barney Inc.
388 Greenwich Street - 34th Floor
New York, New York 10013
Attention: Adrienne Garofalo, Registration Coordinator
Facsimile: (212) 816-7912
If, since the date of acceptance of a purchaser's offer, the Prospectus shall
have been supplemented solely to reflect any sale of Notes on terms different
from those agreed to between the Company and such purchaser or a change in
posted rates not applicable to such purchaser, such purchaser shall not receive
the Prospectus as supplemented by such new supplement, but shall receive the
Prospectus as supplemented to reflect the terms of the Notes being purchased by
such purchaser and otherwise as most recently amended or supplemented on the
date of the delivery of the Prospectus. The Trustee will make all such
deliveries with respect to all Notes sold directly by the Company.
Authenticity of Signatures
The Company will cause the Trustee to furnish the Agents from
time to time with the specimen signatures of each of the Trustee's officers,
employees and agents who have been authorized by the Trustee to authenticate
Notes, but the Agents will have no obligation or liability to the Company or the
Trustee in respect of the authenticity of the signature of any officer, employee
or agent of the Company or the Trustee on any Note.
Advertising Costs
The Company will determine with the Agents the amount and
nature of advertising that may be appropriate in offering the Notes. Advertising
expenses incurred with the written consent of the Company will be paid by the
Company.
D-11
<PAGE>
SPECIAL ADMINISTRATIVE PROCEDURES FOR BOOK-ENTRY NOTES
Each Note will be represented by either a Global Security (as
defined hereinafter) delivered to CB, as agent for The Depository Trust Company
("DTC"), and recorded in the book-entry system maintained by DTC (a "Book-Entry
Note") or a certificate delivered to the Holder thereof or a Person designated
by such Holder (a "Certificated Note"). An owner of a Book-Entry Note will not
be entitled to receive a certificate representing such Note. In connection with
the qualification of the Book-Entry Notes for eligibility in the book-entry
system maintained by DTC, CB will perform the custodial, document control and
administrative functions described below, in accordance with its respective
obligations under a Letter of Representations from the Company and CB to DTC
dated the date hereof and a Medium-Term Note Certificate Agreement between CB
and DTC, dated as of December 2, 1988 (the "Certificate Agreement"), and its
obligations as a participant in DTC, including DTC's Same-Day Funds Settlement
System ("SDFS"). Except as otherwise set forth in this Exhibit D with respect to
matters not covered by the administrative procedures set forth below, Book-Entry
Notes will be issued in accordance with the administrative procedures set forth
below.
Issuance: On any date of settlement (as
defined under "Settlement" below)
for one or more Fixed Rate Book-
Entry Notes, the Company will issue
a single Global Security in fully
registered form without coupons (a
"Global Security") representing up
to $200,000,000 principal amount of
all of such Notes that have the
same Original Issue Date, interest
rate, Stated Maturity and other
terms. If the principal amount of
the Book-Entry Notes exceeds
$200,000,000, one Global Security
shall be issued with respect to
each $200,000,000 of principal
amount and an additional Global
Security shall be issued with
respect to any remaining principal
amount. Similarly, on any
settlement date for one or more
Floating Rate Book-Entry Notes, the
Company will issue a single Global
Security representing up to
$200,000,000 (subject to the same
procedures for amounts in excess of
$200,000,000 as described above)
D-12
<PAGE>
principal amount of all of such
Notes that have the same Original
Issue Date, Interest Rate Basis,
Initial Interest Rate, Interest
Payment Period, Interest Payment
Dates, Index Maturity, Spread or
Spread Multiplier, if any, minimum
interest rate (if any), maximum
interest rate (if any), redemption
provisions, if any, Stated Maturity
and other terms. Each Global
Security will be dated and issued as
of the date of its authentication by
the CB, as Trustee. No Global
Security will represent (i) both
Fixed Rate and Floating Rate
Book-Entry Notes or (ii) any
Certificated Note.
Identification The Company will arrange, on or
Numbers: prior to commencement of a program
for the offering of Book-Entry
Notes, with the CUSIP Service Bureau
of Standard & Poor's Corporation
(the "CUSIP Service Bureau") for the
reservation of a series of CUSIP
numbers (including tranche numbers),
consisting of approximately 900
CUSIP numbers and relating to Global
Securities representing the
Book-Entry Notes. The Company has or
will obtain from the CUSIP Service
Bureau a written list of such series
of reserved CUSIP numbers and will
deliver to CB and DTC such written
list of 900 CUSIP numbers of such
series. CB will assign CUSIP numbers
to Global Securities as described
below under Settlement Procedure
"C". DTC will notify the CUSIP
Service Bureau periodically of the
CUSIP numbers that CB has assigned
to Global Securities. CB will notify
the Company at any time when fewer
than 100 of the reserved CUSIP
numbers remain unassigned to Global
Securities, and if it deems
necessary, the Company will reserve
additional CUSIP numbers for
assignment to Global Securities
representing Book-Entry Notes. Upon
obtaining such additional
D-13
<PAGE>
CUSIP numbers CB shall deliver such
additional CUSIP numbers to the
Company and DTC.
Registration: Each Global Security will be
registered in the name of Cede &
Co., as nominee for DTC, on the
registration books maintained under
the Indenture. The beneficial
owner of a Book-Entry Note (or one
or more indirect participants in
DTC designated by such owner) will
designate one or more participants
in DTC (with respect to such Note,
the "Participants") to act as agent
or agents for such owner in
connection with the book-entry
system maintained by DTC, and DTC
will record in book-entry form, in
accordance with instructions
provided by such Participants, a
credit balance with respect to such
Note in the account of such
Participants. The ownership
interest of such beneficial owner
in such Note will be recorded
through the records of such
Participants or through the
separate records of such
Participants and one or more
indirect participants in DTC.
Transfers: Transfers of a Book-Entry Note will
be accomplished by book entries
made by DTC and, in turn, by
Participants (and in certain cases,
one or more indirect participants
in DTC) acting on behalf of
beneficial transferors and
transferees of such Note.
Consolidation and CB may deliver to DTC and
Exchange: the CUSIP Service Bureau at any
time a written notice of
consolidation specifying (i) the
CUSIP numbers of two or more
Outstanding Global Securities that
represent (A) Fixed Rate Book-Entry
Notes having the same Original Issue
Date, interest rate, Stated Maturity
and other terms and with respect to
which interest has been paid to the
same date or
D-14
<PAGE>
(B) Floating Rate Book-Entry Notes
having the same Interest Rate Basis,
Original Issue Date, Initial
Interest Rate, Interest Payment
Dates, Index Maturity, Spread or
Spread Multiplier, if any, minimum
interest rate (if any), maximum
interest rate (if any), redemption
provisions, if any, Stated Maturity
and other terms and with respect to
which interest has been paid to the
same date, (ii) a date, occurring at
least thirty days after such written
notice is delivered and at least
thirty days before the next Interest
Payment Date for such Book-Entry
Notes, on which such Global
Securities shall be exchanged for a
single replacement Global Security
and (iii) a new CUSIP number,
obtained from the Company, to be
assigned to such replacement Global
Security. Upon receipt of such a
notice, DTC will send to its
participants (including CB) a
written reorganization notice to the
effect that such exchange will occur
on such date. Prior to the specified
exchange date, CB will deliver to
the CUSIP Service Bureau a written
notice setting forth such exchange
date and the new CUSIP number and
stating that, as of such exchange
date, the CUSIP numbers of the
Global Securities to be exchanged
will no longer be valid. On the
specified exchange date, CB will
exchange such Global Securities for
a single Global Security bearing the
new CUSIP number, and the CUSIP
numbers of the exchanged Global
Securities will, in accordance with
CUSIP Service Bureau procedures, be
cancelled and not immediately
reassigned. Notwithstanding the
foregoing, if the Global Securities
to be exchanged exceed $200,000,000
in aggregate principal amount, one
Global Security will be
authenticated and issued to
represent each $200,000,000 of
principal amount of the exchanged
D-15
<PAGE>
Global Securities and an additional
Global Security will be
authenticated and issued to
represent any remaining principal
amount of such Global Securities
(see "Denominations" below).
Maturities: Each Book-Entry Note will mature on
a date not less than one year or
more than 40 years after the
settlement date for such Note. A
Floating Rate Book-Entry Note will
mature only on an Interest Payment
Date for such Note.
Denominations: Book-Entry Notes will be issued in
principal amounts of $1,000 or any
amount in excess thereof that is an
integral multiple of $1,000.
Global Securities representing one
or more Book-Entry Notes will be
denominated in principal amounts
not in excess of $200,000,000. If
one or more Book-Entry Notes having
an aggregate principal amount in
excess of $200,000,000 would, but
for the preceding sentence, be
represented by a single Global
Security, then one Global Security
will be issued to represent each
$200,000,000 principal amount of
such Book-Entry Note or Notes and
an additional Global Security will
be issued to represent any
remaining principal amount of such
Book-Entry Note or Notes. In such
a case, each of the Global
Securities representing such Book-
Entry Note or Notes shall be
assigned the same CUSIP number.
Interest: General. Interest on each Book-
-------
Entry Note will accrue from the
Original Issue Date or the most
recent Interest Payment Date to
which interest has been paid or
duly provided for on the Global
Security representing such Note.
Each payment of interest on a Book-
Entry Note will include interest
accrued through the day preceding,
as the case may be, the Interest
Payment Date or Maturity; provided,
--------
D-16
<PAGE>
however, that if the Interest Reset
Dates with respect to any such Note
are daily or weekly, interest
payable on any Interest Payment
Date, other than interest payable on
any date on which principal for such
Note is payable, will include
interest accrued from but excluding
the second preceding Regular Record
Date to and including the next
preceding Regular Record Date.
Standard & Poor's Corporation will
use the information received in the
pending deposit message described
under Settlement Procedure "C" below
in order to include the amount of
any interest payable and certain
other information regarding the
related Global Security in the
appropriate weekly bond report
published by Standard & Poor's
Corporation.
Promptly after each Interest
Determination Date for Floating Rate
Notes, the Company will notify CB,
and CB in turn will notify Standard
& Poor's Corporation, of the
interest rates determined on such
Interest Determination Date.
Payments of Payments of Interest Only.
Principal Promptly after each Regular Record
and Interest: Date, CB will deliver to the
Company and DTC a written notice
specifying by CUSIP number the
amount of interest to be paid on
each Global Security on the
following Interest Payment Date
(other than an Interest Payment Date
coinciding with Maturity) and the
total of such amounts. DTC will
confirm the amount payable on each
Global Security on such Interest
Payment Date by reference to the
daily bond reports published by
Standard & Poor's Corporation. The
Company will pay to CB, as paying
agent, the total amount of interest
due on such Interest Payment Date
(other than at Maturity), and CB
will pay such amount to DTC at the
times and in
D-17
<PAGE>
the manner set forth below under
"Manner of Payment".
Payments at Maturity. On or about
the first Business Day of each
month, CB will deliver to the
Company and DTC a written list of
principal and interest (to the
extent ascertainable) to be paid on
each Global Security maturing in the
following month. The Company, CB and
DTC will confirm the amounts of such
principal and interest payments with
respect to each such Global Security
on or about the fifth Business Day
preceding the Maturity of such
Global Security, together with
interest due at such Maturity. CB
will pay such amount to DTC at the
times and in the manner set forth
below under "Manner of Payment".
Promptly after payment to DTC of the
principal and interest due at the
Maturity of such Global Security, CB
will cancel such Global Security and
deliver it to the Company with an
appropriate debit advice.
Manner of Payment. The total amount
of any principal and interest due on
Global Securities on any Interest
Payment Date or at Maturity shall be
paid by the Company to CB in funds
available for use by CB as of 9:30
A.M. (New York City time) on such
date. The Company will make such
payment on such Global Securities by
instructing CB to withdraw funds
from an account maintained by the
Company at CB. The Company will
confirm such instructions in writing
to CB. For maturity, redemption or
any other principal payments: prior
to 10 A.M. (New York City time) on
such date or as soon as possible
thereafter, CB will make such
payments to DTC in same day funds in
accordance with DTC's Same Day Funds
Settlement
D-18
<PAGE>
Paying Agent Operating Procedures.
For interest payments: CB will make
such payments to DTC in accordance
with existing arrangements between
DTC and CB. DTC will allocate such
payments to its participants in
accordance with its existing
operating procedures. Neither the
Company (either as issuer or as
Paying Agent) nor CB shall have any
direct responsibility or liability
for the payment by DTC to such
Participants of the principal of and
interest on the Book-Entry Notes.
Withholding Taxes. The amount of any
taxes required under applicable law
to be withheld from any interest
payment on a Book-Entry Note will be
determined and withheld by the
Participant, indirect participant in
DTC or other Person responsible for
forwarding payments and materials
directly to the beneficial owner of
such Note.
Settlement Settlement Procedures with regard
Procedures: to each Book-Entry Note which will
be registered in the name of the
nominee of DTC (unless otherwise
indicated in the applicable Pricing
Supplement, "Cede & Co.") sold by
the Company through an Agent, as
agent, shall be as follows:
A. Such Agent will advise the
Company by telex or facsimile
of the following settlement
information:
1. Principal amount of the
Note (and, if multiple
Notes are to be issued,
denominations thereof).
2. Settlement date (Original
Issue Date).
3. Stated Maturity.
4. Issue Price.
D-19
<PAGE>
5. Trade Date.
6. Interest rate:
(a) Fixed Rate Notes:
i) interest rate
ii) overdue rate,
if any
(b) Floating Rate Notes:
i) Interest Rate
Basis (e.g.,
Commercial
Paper Rate)
ii) Initial
Interest Rate
iii) Spread or
Spread
Multiplier, if
any
iv) Interest Reset
Dates
v) Index Maturity
vi) maximum and
minimum
interest rates,
if any
vii) overdue rate,
if any
7. Interest Payment Date(s)
and Interest Payment
Period.
8. Optional Interest Reset
Date, if any, and
Subsequent
Interest Period,
if any.
9. Extension Period, if any,
and Final Maturity Dates,
if any.
10. The date on or after
which the Notes are
redeemable at the option
of the Company or
repurchasable by the
Company at the option of
the holder, and
additional redemption or
D-20
<PAGE>
repurchase provisions, if
any.
11. Amortization schedule, if
any.
12. Wire transfer
information, if
applicable.
13. Agent's Commission (to be
paid in the form of a
discount from the
proceeds remitted to the
Company upon Settlement).
14. Whether such Book-Entry
Note is issued at an
original issue discount
("OID"), and, if so, the
total amount of OID, the
yield to maturity and the
initial accrual period of
OID.
15. Any other applicable
terms required to
complete a Note.
B. The Company will advise CB by
electronic transmission of the
information set forth in
Settlement Procedure "A" above
and the name of such Agent.
Each such communication by the
Company shall constitute a
representation and warranty by
the Company to CB and each
Agent that (i) such Note is
then, and at the time of
issuance and sale thereof will
be, duly authorized for
issuance and sale by the
Company, (ii) such Note, and
the Global Security
representing such Note, will
conform with the terms of the
Indenture and (iii) upon
authentication and delivery of
such Global Security, the
aggregate initial offering
price of all Notes issued
D-21
<PAGE>
under the Indenture will not
exceed $300,000,000.
CB will assign a CUSIP number
to the Global Security
representing such Note and
enter a pending deposit
message through DTC's
Participant Terminal System,
providing the following
settlement information to DTC,
such Agent and Standard &
Poor's Corporation:
1. The applicable
information set forth in
Settlement Procedure "A".
2. Identification as a Fixed
Rate Book-Entry Note or a
Floating Rate Book-Entry
Note.
3. Initial Interest Payment
Date for such Note,
number of days by which
such date succeeds the
related "DTC Regular
Record Date" (which term
means the Regular Record
Date except in the case
of Floating Rate Notes
which reset daily or
weekly in which case it
means the date 5 calendar
days immediately
preceding the Interest
Payment Date) and amount
of interest payable on
such Interest Payment
Date per $1,000 of
principal amount of such
Note.
4. Frequency of interest
payments (monthly,
semiannually, quarterly,
etc.).
5. CUSIP number of the
Global Security
representing such Note.
D-22
<PAGE>
D. Such Agent will deliver to
the purchaser a copy of the
most recent Prospectus
applicable to the Note with
or prior to any written
offer of Notes and the
confirmation and payment by
the purchaser of the Note.
Such Agent will confirm the purchase
of such Note to the purchaser either
by transmitting to the Participants
with respect to such Note a
confirmation order or orders through
DTC's institutional delivery system
or by mailing a written confirmation
to such purchaser.
E. CB, as Trustee, will complete
and authenticate the note
certificate evidencing the
Global Security representing
such Book-Entry Note.
F. DTC will credit such Note to
CB's participant account at
DTC.
G. CB will enter an SDFS deliver
order through DTC's
Participant Terminal System
instructing DTC to (i) debit
such Note to CB's participant
account and credit such Note
to such Agent's participant
account and (ii) debit such
Agent's settlement account and
credit CB's settlement account
for an amount equal to the
price of such Note less such
Agent's commission. The entry
of such a deliver order shall
constitute a representation
and warranty by CB to DTC that
(i) the Global Security
representing such Book-Entry
Note has been issued and
authenticated and (ii) CB is
holding such Global Security
pursuant to the Certificate
Agreement.
D-23
<PAGE>
H. Such Agent will enter an SDFS
deliver order through DTC's
Participant Terminal System
instructing DTC (i) to debit
such Note to such Agent's
participant account and credit
such Note to the participants
accounts of the Participants
with respect to such Note and
(ii) to debit the settlement
accounts of such Participants
and credit the settlement
account of such Agent for an
amount equal to the price of
such Note.
I. Transfers of funds in
accordance with SDFS
deliver orders described in
Settlement Procedures "G"
and "H" will be settled in
accordance with SDFS
operating procedures in
effect on the Settlement
date.
J. CB will credit to an account
of the Company maintained at
CB funds available for
immediate use in the amount
transferred to CB in
accordance with Settlement
Procedure "G".
Settlement Procedures For orders of Book-Entry Notes
Timetable: solicited by an Agent, as agent,
and accepted by the Company for
settlement, Settlement Procedures
"A" through "J" set forth above
shall be completed as soon as
possible but not later than the
respective times (New York City
time) set forth below:
Settlement
Procedure Time
A 11:00 A.M. on the sale
date
B 12 Noon on the sale
date
C 2:00 P.M. on the sale
date
D Day after sale date
D-24
<PAGE>
E 9:00 A.M. on the
Settlement date
F 10:00 A.M. on
Settlement date
G-H 2:00 P.M. on Settlement
date
I 4:45 P.M. on Settlement
date
J 5:00 P.M. on Settlement
date
If a sale is to be settled more than
one Business Day after the sale
date, Settlement Procedures "A", "B"
and "C" shall be completed as soon
as practicable but no later than
11:00 A.M., 12 Noon and 2:00 P.M.,
as the case may be, on the first
Business Day after the sale date. If
the initial interest rate for a
Floating Rate Book-Entry Note has
not been determined at the time that
Settlement Procedure "A" is
completed, Settlement Procedures "B"
and "C" shall be completed as soon
as such rate has been determined but
no later than 12:00 Noon and 2:00
P.M., respectively, on the Second
Business Day before the Settlement
date. Settlement Procedure "J" is
subject to extension in accordance
with any extension of Fedwire
closing deadlines and in the other
events specified in effect on the
Settlement date.
If Settlement of a Book-Entry Note
is rescheduled or canceled, CB,
after receiving notice thereof from
the Company or the relevant Agent,
will deliver to DTC, through DTC's
Participant Terminal System, a
cancellation message to such effect
by no later than 2:00 P.M. on the
Business Day immediately preceding
the scheduled Settlement date.
Failure to Settle: If CB has not entered an SDFS
deliver order with respect to a
Book-Entry Note pursuant to
Settlement Procedure "G", then, upon
written request (which may be
D-25
<PAGE>
effected by facsimile transmission)
of the Company, CB shall deliver to
DTC, through DTC's Participant
Terminal System, as soon as
practicable but no later than 2:00
P.M. on any Business Day, a
withdrawal message instructing DTC
to debit such Note to CB's
participant account. DTC will
process the withdrawal message,
provided that CB's participant
account contains a principal amount
of the Global Security representing
such Note that is at least equal to
the principal amount to be debited.
If a withdrawal message is processed
with respect to all the Book-Entry
Notes represented by a Global
Security, CB shall mark the Global
Security "canceled", make
appropriate entries in CB's records
and send such canceled Global
Security to the Company. The CUSIP
number assigned to such Global
Security shall, in accordance with
CUSIP Service Bureau procedures, be
canceled and not immediately
reassigned. If a withdrawal message
is processed with respect to one or
more, but not all, of the Book-Entry
Notes represented by a Global
Security, CB will exchange such
Global Security for two Global
Securities, one of which shall
represent such Book-Entry Note or
Notes and shall be canceled
immediately after issuance and the
other of which shall represent the
other Book-Entry Notes previously
represented by the surrendered
Global Security and shall bear the
CUSIP number of the surrendered
Global Security.
If the purchase price for any Book-
Entry Note is not timely paid to the
Participants with respect to such
Note by the beneficial purchaser
thereof (or a Person, including an
indirect participant in DTC, acting
on behalf of such purchaser), such
Participants and, in turn, the Agent
for such Note
D-26
<PAGE>
may enter SDFS deliver orders
through DTC's Participant Terminal
System debiting such Book-Entry Note
free to such Agent's participant
account and crediting such
Book-Entry Note free to the
participant account of CB and shall
notify CB and the Company thereof.
Thereafter, CB (i) will immediately
notify the Company, once CB has
confirmed that such Book-Entry Note
has been credited to its participant
account, and the Company shall
immediately transfer by Fed wire
(immediately available funds) to
such Agent an amount equal to the
amount with respect to such
Book-Entry Note which was previously
sent by wire transfer to the account
of the Company in accordance with
Settlement Procedure "J", and (ii)
CB will deliver the withdrawal
message and take the related actions
described in the preceding
paragraph. Such debits and credits
will be made on the Settlement date,
if possible, and in any event not
later than 5:00 P.M. on the
following Business Day. If such
failure shall have occurred for any
reason other than a default by the
Agent in the performance of its
obligations hereunder and under the
Agency Agreement, then the Company
will reimburse the Agent on an
equitable basis for the loss of the
use of the funds during the period
when they were credited to the
account of the Company.
Notwithstanding the foregoing, upon
any failure to settle with respect
to a Book-Entry Note, DTC may take
any actions in accordance with its
SDFS operating procedures then in
effect. In the event of a failure to
settle with respect to one or more,
but not all, of the Book- Entry
Notes to have been represented by a
Global Security, CB will provide, in
accordance with Settlement Procedure
"E", for the
D-27
<PAGE>
authentication and issuance of a
Global Security representing the
other Book-Entry Notes to have been
represented by such Global Security
and will make appropriate entries in
its records.
CB Not to Nothing herein shall be deemed to
Risk Funds: require CB to risk or expend its
own funds in connection with any
payment to the Company, DTC, the
Agents, or the purchaser, it being
understood by all parties that
payments made by CB to the Company,
DTC, the Agents, or the purchaser
shall be made only to such extent
that funds are provided to CB for
such purpose. Similarly, nothing
herein shall alter any duty, or
limit or diminish any right or
immunity, of CB under the Indenture.
D-28
<PAGE>
EXHIBIT E
PURCHASE AGREEMENT
Georgia Power Company __________ __, 19__ 333 Piedmont Avenue, N.E.
Atlanta, Georgia 30308
Attention:
The undersigned agrees to purchase the following principal amount of
the Notes described in the Distribution Agreement dated ________ __, 1995 (as it
may be supplemented or amended from time to time, the "Distribution Agreement"):
Principal Amount: [$] _____________________
Interest Rate: ____%
Discount: ____% of Principal Amount
Aggregate Price to be
paid to Company
(in immediately
available funds): [$] _____________________
Settlement Date: _____________________
Other Terms: _____________________
Our obligation to purchase Notes hereunder is subject to the continued
accuracy of your representations and warranties contained in the Distribution
Agreement and to your performance and observance of all applicable covenants and
agreements contained therein, including, without limitation, your obligations
pursuant to Section 5 and Section 6 thereof. Our obligation hereunder is subject
to the conditions set forth in Section 4 of the Distribution Agreement and to
the further condition that we shall receive (a) the opinion required to be
delivered pursuant to Section 4(b)(1) of the Distribution Agreement, (b) the
certificates required to be delivered pursuant to Sections 4(e) and 4(j) of the
Distribution Agreement, (c), unless otherwise agreed upon, the letter referred
to in Section 4(b)(3), in each case dated as of the above Settlement Date and
(d) and such further information, certificates and documents as the Agents or
counsel to the Agents may reasonably request.
In further consideration of our agreement hereunder, you agree that
between the date hereof and the above Settlement Date, you will not offer or
sell, or enter into any agreement to sell, any debt securities of the Company,
other than borrowings under your revolving credit agreements and lines of
credit, the private placement of securities and
E-1
<PAGE>
issuances of your commercial paper or other issuances of
Notes.
We may terminate this Agreement, immediately upon notice to you, at any
time prior to the Settlement Date, if after the date hereof and prior to the
Settlement Date: (i) trading in securities on the New York Stock Exchange shall
have been generally suspended; (ii) minimum or maximum ranges for prices shall
have been generally established on the New York Stock Exchange by the Commission
or by the New York Stock Exchange; (iii) a general banking moratorium shall have
been declared by Federal or State of New York authorities; or (iv) there shall
have occurred any outbreak or escalation of major hostilities in which the
United States is involved, any declaration of war by Congress or any other
substantial national calamity or emergency affecting the United States in any
such case provided for in clause (i) through (iv) with the result that in our
judgment makes it impracticable or inadvisable to proceed with the purchase of
Notes from the Company or you are unable to provide any of the opinions,
certificates or letters referred to in the second preceding paragraph. In the
event of such termination, no party shall have any liability to the other party
hereto, except as provided in Sections 3(h), 6 and 12 of the Distribution
Agreement.
E-2
<PAGE>
This Agreement shall be governed by and construed in accordance with
the laws of Georgia.
[Insert name of Agent[s]]
By___________________________
[Title]
Accepted: , 19__
Georgia Power Company
By____________________________
[Title]
E-3
<PAGE>
Exhibit 4(c)2
GEORGIA POWER COMPANY
to
CHEMICAL BANK
(Successor by Merger to Chemical Bank New York Trust
Company and The New York Trust Company),
Trustee
SUPPLEMENTAL INDENTURE
Dated as of July 1, 1995
Providing among other things for
FIRST MORTGAGE BONDS
First Pollution Control Series due July 1, 2025
Second Pollution Control Series due July 1, 2025
<PAGE>
SUPPLEMENTAL INDENTURE, dated as of July 1, 1995, made and entered into
by and between GEORGIA POWER COMPANY, a corporation organized and existing under
the laws of the State of Georgia with its principal office in Atlanta, Fulton
County, Georgia (hereinafter commonly referred to as the "Company"), and
CHEMICAL BANK (successor by merger to Chemical Bank New York Trust Company and
The New York Trust Company), a corporation organized and existing under the laws
of the State of New York, with its principal corporate trust office in the
Borough of Manhattan, The City of New York (hereinafter commonly referred to as
the "Trustee"), as Trustee under the Indenture dated as of March 1, 1941
originally entered into between the Company and The New York Trust Company, as
Trustee (hereinafter sometimes referred to as the "Original Indenture" and said
The New York Trust Company being hereinafter sometimes referred to as the
"Original Trustee"), securing bonds issued and to be issued as provided therein,
which Original Indenture has heretofore been supplemented and amended by various
supplemental indentures (which Original Indenture as so supplemented and amended
is hereinafter sometimes referred to as the "Indenture").
WHEREAS the Company and the Original Trustee have executed and
delivered the Original Indenture for the purpose of securing an issue of bonds
of the 3-1/2% Series due 1971 described therein and such additional bonds as may
from time to time be issued under and in accordance with the terms of the
Indenture, the aggregate principal amount of bonds to be secured thereby being
presently limited to $5,000,000,000 at any one time outstanding (except as
provided in Section 2.01 of the Indenture), and the Original Indenture is of
record in the public office of each county in the States of Georgia, Alabama,
Tennessee and South Carolina, and in the public office of the District of
Columbia, in which this Supplemental Indenture is to be recorded, and the
Original Indenture is on file at the principal corporate trust office of the
Trustee; and
WHEREAS the Company and the Trustee have executed and delivered various
supplemental indentures for the purpose, among others, of further securing said
bonds and of creating the bonds of other series described therein, which
supplemental indentures described and set forth additional property conveyed
thereby and are also of record in the public offices of some or all of the
counties in the States of Georgia, Alabama, Tennessee and South Carolina in
which this Supplemental Indenture is to be recorded, and one of which
supplemental indentures is also of record in the public office of the District
of Columbia, and said supplemental indentures are also on file at the principal
corporate trust office of the Trustee; and
WHEREAS the Company and the Trustee have executed and delivered the
Supplemental Indenture dated as of May 15, 1991, by which the third paragraph of
Section 1.02 of the Indenture was amended to read as follows:
<PAGE>
"The term 'Board of Directors' shall mean the Board of
Directors of the Company or any committee of the Board of Directors of
the Company authorized, with respect to any particular matter, to
exercise the power of the Board of Directors of the Company."; and
WHEREAS the Indenture provides for the issuance of bonds thereunder in
one or more series and the Company, by appropriate corporate action in
conformity with the terms of the Indenture, has duly determined to create two
series of bonds under the Indenture to be designated, respectively, as "First
Pollution Control Series due July 1, 2025" (hereinafter sometimes referred to as
the "new First Series Bonds") and "Second Pollution Control Series due July 1,
2025" (hereinafter sometimes referred to as the "new Second Series Bonds") (the
new First Series Bonds and the new Second Series Bonds being hereinafter
sometimes referred to collectively as the "new Bonds"), each of which bonds
shall also bear the descriptive title "First Mortgage Bond", the bonds of each
such series to bear interest as herein provided and to mature on the date
designated in the title thereof; and
WHEREAS by a Plan of Merger dated June 11, 1959, effective September 8,
1959, between The New York Trust Company and Chemical Corn Exchange Bank, said
The New York Trust Company was merged into said Chemical Corn Exchange Bank
which continued under the name and style of Chemical Bank New York Trust
Company; and by a Plan of Merger dated November 26, 1968, effective February 17,
1969, among Chemical New York Corporation, Chemical Bank New York Trust Company
and Chemical Bank, said Chemical Bank New York Trust Company was merged into
said Chemical Bank which continued under the name and style of Chemical Bank;
and by virtue of said mergers Chemical Bank has become successor to The New York
Trust Company and Chemical Bank New York Trust Company, as Trustee under the
Indenture, and has become vested with all of the title to the mortgaged property
and trust estate; and with the trusts, powers, discretions, immunities,
privileges and all other matters as were vested in said The New York Trust
Company and said Chemical Bank New York Trust Company under the Indenture, with
like effect as if originally named as Trustee therein; and
WHEREAS each of the new Bonds of each series is to be substantially in
the following form, with appropriate insertions and deletions, to wit:
-2-
<PAGE>
[FORM OF NEW BOND OF EACH SERIES]
GEORGIA POWER COMPANY
FIRST MORTGAGE BOND, _____ POLLUTION CONTROL SERIES
DUE JULY 1, 2025
No. $
Georgia Power Company, a Georgia corporation (hereinafter called the
"Company"), for value received, hereby promises to pay to Bank South, Atlanta,
Georgia (as trustee under a Trust Indenture dated as of July 1, 1995 of the
Development Authority of Monroe County, relating to the Revenue Bonds
(hereinafter mentioned)), or registered assigns, the principal sum of
_____________________ Dollars on July 1, 2025, and to pay to the registered
owner hereof interest on said sum from the latest interest payment date to which
interest has been paid on the bonds of this series preceding the date hereof,
unless the date hereof be an interest payment date to which interest is being
paid, in which case from the date hereof, or unless the date hereof is prior to
the first interest payment date, in which case from July 13, 1995, at the same
rates, until the principal hereof shall have become due and payable, payable on
the same dates, as the Revenue Bonds pursuant to the Revenue Indenture
(hereinafter mentioned).
The obligation of the Company to make payments with respect to the
principal of and premium, if any, and interest on bonds of this series shall be
fully or partially, as the case may be, satisfied and discharged to the extent
that, at any time that any such payment shall be due, the Company shall have
made payments as required by the Company's Note dated July 13, 1995 issued
pursuant to Section 3.2 of the Loan Agreement dated as of July 1, 1995 between
the Development Authority of Monroe County and the Company, relating to the
Revenue Bonds (hereinafter mentioned), sufficient to pay fully or partially the
then due principal of and premium, if any, and interest on the Development
Authority of Monroe County (Georgia) Pollution Control Revenue Bonds (Georgia
Power Company Plant Scherer Project), _____ Series 1995 (hereinafter referred to
as "Revenue Bonds") or there shall be on deposit with the trustee pursuant to
the Trust Indenture dated as of July 1, 1995 of the Development Authority of
Monroe County to Bank South, Atlanta, Georgia, as trustee, relating to the
Revenue Bonds (hereinafter referred to as the "Revenue Indenture"), sufficient
available funds to pay fully or partially the then due
-3-
<PAGE>
principal of and premium, if any, and interest on the Revenue
Bonds.
This bond is one of the bonds issued and to be issued from time to time
under and in accordance with and all secured by an indenture of mortgage or deed
of trust dated as of March 1, 1941 given by the Company to The New York Trust
Company, to which Chemical Bank is successor by merger (hereinafter sometimes
referred to as the "Trustee"), as Trustee, and indentures supplemental thereto,
to which indenture and indentures supplemental thereto (hereinafter referred to
collectively as the "Indenture") reference is hereby made for a description of
the property mortgaged and pledged, the nature and extent of the security and
the rights, duties and immunities thereunder of the Trustee and the rights of
the holders of said bonds and of the Trustee and of the Company in respect of
such security. By the terms of the Indenture the bonds to be secured thereby are
issuable in series which may vary as to date, amount, date of maturity, rate of
interest and in other respects as in the Indenture provided.
Upon notice given by mailing the same, by first class mail postage
prepaid, not less than thirty nor more than forty-five days prior to the date
fixed for redemption to each registered holder of a bond to be redeemed (in
whole or in part) at the last address of such holder appearing on the registry
books, any or all of the bonds of this series may be redeemed by the Company at
any time and from time to time by the payment of the principal amount thereof
and accrued interest thereon to the date fixed for redemption, if redeemed by
the operation of the improvement fund or the replacement fund provisions of the
Indenture or by the use of proceeds of released property, as more fully set
forth in the Indenture.
In the manner provided in the Indenture, the bonds of this series shall
also be redeemable in whole, by payment of the principal amount thereof plus
accrued interest thereon to the date fixed for redemption, upon receipt by the
Trustee of a written demand from the trustee under the Revenue Indenture stating
that the principal amount of all the Revenue Bonds then outstanding under the
Revenue Indenture has been declared immediately due and payable pursuant to the
provisions of Section 8.02 of the Revenue Indenture. As provided in the
Indenture, the date fixed for such redemption may be not more than 180 days
after receipt by the Trustee of the aforesaid written demand and shall be
specified in a notice of redemption given not more than 10 nor less than 5 days
prior to the date so fixed for such redemption. As in the Indenture provided,
such notice of redemption shall be rescinded and become null and void
-4-
<PAGE>
for all purposes under the Indenture upon rescission of the aforesaid written
demand or the aforesaid declaration of maturity under the Revenue Indenture, and
thereupon no redemption of the bonds of this series and no payments in respect
thereof as specified in such notice of redemption shall be effected or required.
In the manner provided in the Indenture, the bonds of this series are
also redeemable in whole or in part upon receipt by the Trustee of a written
demand from the trustee under the Revenue Indenture specifying a principal
amount of Revenue Bonds which have been called for redemption pursuant to the
optional redemption provisions of the Revenue Bonds and the Revenue Indenture.
As provided in the Indenture, bonds of this series equal in principal amount to
the principal amount of such Revenue Bonds to be redeemed pursuant to such
optional redemption provisions will be redeemed on the date fixed for redemption
of the Revenue Bonds at the principal amount of such bonds of this series and
accrued interest thereon to the date fixed for redemption, together with a
premium equal to the redemption premium (if any) payable upon such redemption of
Revenue Bonds.
In case of certain defaults as specified in the Indenture, the
principal of this bond may be declared or may become due and payable on the
conditions, at the time, in the manner and with the effect provided in the
Indenture.
No recourse shall be had for the payment of the principal of or
premium, if any, or interest on this bond, or for any claim based hereon, or
otherwise in respect hereof or of the Indenture, to or against any incorporator,
stockholder, director or officer, past, present or future, as such, of the
Company, or of any predecessor or successor company, either directly or through
the Company, or such predecessor or successor company, under any constitution or
statute or rule of law, or by the enforcement of any assessment or penalty, or
otherwise, all such liability of incorporators, stockholders, directors and
officers being waived and released by the holder and owner hereof by the
acceptance of this bond and being likewise waived and released by the terms of
the Indenture.
This bond is transferable by the registered owner hereof, in person or
by attorney duly authorized, at the principal corporate trust office of the
Trustee, in the Borough of Manhattan, The City of New York, but only in the
manner prescribed in the Indenture, upon the surrender and cancellation of this
bond, and upon any such transfer a new registered bond or bonds, without
coupons, of the same series and maturity date and for the same aggregate
principal amount, in authorized denominations, will be
-5-
<PAGE>
issued to the transferee in exchange herefor. The Company and the Trustee may
deem and treat the person in whose name this bond is registered as the absolute
owner for the purpose of receiving payment of or on account of the principal,
premium, if any, and interest due hereon and for all other purposes. Registered
bonds of this series shall be exchangeable for registered bonds of other
authorized denominations having the same aggregate principal amount, in the
manner and upon the conditions prescribed in the Indenture. However,
notwithstanding the provisions of the Indenture, no charge shall be made upon
any transfer or exchange of bonds of this series other than for any tax or taxes
or other governmental charge required to be paid by the Company.
This bond shall not be valid or become obligatory for any purpose
unless and until it shall have been authenticated by the execution by the
Trustee or its successor in trust under the Indenture of the certificate hereon.
IN WITNESS WHEREOF, Georgia Power Company has caused this bond to be
executed in its name by its President or one of its Vice Presidents by his
signature or a facsimile thereof, and its corporate seal or a facsimile thereof
to be hereto affixed and attested by its Secretary or one of its Assistant
Secretaries by his signature or a facsimile thereof.
Dated,
GEORGIA POWER COMPANY
By:
Attest:
TRUSTEE'S CERTIFICATE
This bond is one of the bonds, of the series designated therein,
described in the within-mentioned Indenture.
CHEMICAL BANK, as Trustee
By:
Authorized Officer
-6-
<PAGE>
AND WHEREAS all acts and things necessary to make the new Bonds of each
series, when authenticated by the Trustee and issued as in the Indenture and
this Supplemental Indenture provided, the valid, binding and legal obligations
of the Company, and to constitute the Indenture and this Supplemental Indenture
valid, binding and legal instruments for the security thereof, have been done
and performed, and the creation, execution and delivery of the Indenture and
this Supplemental Indenture and the creation, execution and issue of bonds
subject to the terms hereof and of the Indenture, have in all respects been duly
authorized;
NOW, THEREFORE, in consideration of the premises, and of the acceptance
and purchase by the holders thereof of the bonds issued and to be issued under
the Indenture and of the sum of One Dollar duly paid by the Trustee to the
Company, and of other good and valuable considerations, the receipt whereof is
hereby acknowledged, and for the purpose of further securing the due and
punctual payment of the principal of and premium, if any, and interest on the
bonds issued and now outstanding under the Indenture, and the $45,000,000
principal amount of new First Series Bonds and $40,000,000 principal amount of
new Second Series Bonds proposed to be issued and all other bonds which shall be
issued under the Indenture, or the Indenture as supplemented and amended, and
for the purpose of further securing the faithful performance and observance of
all covenants and conditions therein and in any indenture supplemental thereto
set forth, the Company has given, granted, bargained, sold, transferred,
assigned, hypothecated, pledged, mortgaged, warranted, aliened and conveyed and
by these presents does give, grant, bargain, sell, transfer, assign,
hypothecate, pledge, mortgage, warrant, alien and convey unto Chemical Bank, as
Trustee, as provided in the Indenture, and its successor or successors in the
trust thereby and hereby created, and to its or their assigns forever, all the
right, title and interest of the Company in and to all premises, property,
franchises and rights of every kind and description, real, personal and mixed,
tangible and intangible, now owned or hereafter acquired by the Company
(excepting, however, that which is by the Indenture expressly reserved from the
lien and effect thereof), including but not limited to the property described in
Exhibit "A" attached hereto and by this reference made a part hereof; unless
otherwise noted, such property is located in the State of Georgia and unless
otherwise noted, references herein to a county or counties shall mean such
county or counties in the State of Georgia;
TOGETHER WITH all and singular the tenements, hereditaments and
appurtenances belonging or in anywise appertaining to the property, rights and
franchises or any thereof, referred to in
-7-
<PAGE>
the foregoing granting clauses, with the reversion and reversions, remainder and
remainders and (subject to the provisions of Article X of the Indenture) the
tolls, rents, revenues, issues, earnings, income, products and profits thereof,
and all the estate, right, title and interest and claim whatsoever, at law as
well as in equity, which the Company now has or may hereafter acquire in and to
the aforesaid property, rights and franchises and every part and parcel thereof.
TO HAVE AND TO HOLD all said property, rights and franchises hereby
conveyed, assigned, pledged or mortgaged, or intended so to be, unto the
Trustee, its successor or successors in trust, and their assigns forever;
BUT IN TRUST, NEVERTHELESS, with power of sale, for the equal and
proportionate benefit and security of the holders of all bonds and interest
coupons now or hereafter issued under the Indenture, as supplemented and
amended, pursuant to the provisions thereof, and for the enforcement of the
payment of said bonds and coupons when payable and for the performance of and
compliance with the covenants and conditions of the Indenture, as supplemented
and amended, without any preference, distinction or priority as to lien or
otherwise of any bond or bonds over others by reason of the difference in time
of the actual issue, sale or negotiation thereof or for any other reason
whatsoever, except as otherwise expressly provided in the Indenture, as
supplemented and amended; and so that each and every bond now or hereafter
issued thereunder shall have the same lien; and so that the principal of and
premium, if any, and interest on every such bond shall, subject to the terms
thereof, be equally and proportionately secured thereby and hereby, as if it had
been made, executed, delivered, sold and negotiated simultaneously with the
execution and delivery of the Original Indenture.
AND IT IS EXPRESSLY DECLARED that all bonds issued and secured under
the Indenture and hereunder are to be issued, authenticated and delivered, and
all said property, rights and franchises hereby and by the Indenture conveyed,
assigned, pledged or mortgaged, or intended so to be (including all the right,
title and interest of the Company in and to any and all premises, property,
franchises and rights of every kind and description, real, personal and mixed,
tangible and intangible, thereafter acquired by the Company and whether or not
specifically described in the Original Indenture or in any indenture
supplemental thereto, except any therein expressly excepted), are to be dealt
with and disposed of, under, upon and subject to the terms, conditions,
stipulations, covenants,
-8-
<PAGE>
agreements, trusts and uses and purposes expressed in the Indenture and herein,
and it is hereby agreed as follows:
SECTION 1. There are hereby created two series of bonds designated as
hereinabove in the fourth Whereas clause set forth, each of which shall contain
suitable provisions with respect to the matters hereinafter in this Section
specified, and the form thereof shall be substantially as hereinbefore set
forth. New Bonds of each such series shall mature on the date specified in the
title thereof, and the definitive bonds of each such series may be issued only
as registered bonds without coupons. New Bonds of each such series shall be in
such denominations as the Board of Directors shall approve, and execution and
delivery to the Trustee for authentication shall be conclusive evidence of such
approval. The serial numbers of new Bonds of each such series shall be such as
may be approved by any officer of the Company, the execution thereof by any such
officer to be conclusive evidence of such approval.
New Bonds, until the principal thereof shall have become due and
payable, shall bear interest at the same rates, payable on the same dates, as
(i) the First Series Monroe Bonds pursuant to the First Series Monroe Indenture
(each as hereinafter defined) in the case of the new First Series Bonds and (ii)
the Second Series Monroe Bonds pursuant to the Second Series Monroe Indenture
(each as hereinafter defined) in the case of the new Second Series Bonds. New
Bonds of each such series shall be dated the date of authentication.
The principal of and premium, if any, and interest on the new Bonds of
each such series shall be payable in any coin or currency of the United States
of America which at the time of payment is legal tender for public and private
debts, at the office or agency of the Company in the Borough of Manhattan, The
City of New York, designated for that purpose.
New Bonds of each such series may be transferred at the principal
corporate trust office of the Trustee, in the Borough of Manhattan, The City of
New York. New Bonds of each such series shall be exchangeable for other bonds of
the same series, in the manner and upon the conditions prescribed in the
Indenture, upon the surrender of such new Bonds at said principal corporate
trust office of the Trustee. However, notwithstanding the provisions of Section
2.05 of the Indenture, no charge shall be made upon any transfer or exchange of
new Bonds of either of said series other than for any tax or taxes or other
governmental charge required to be paid by the Company.
-9-
<PAGE>
Any or all of the new Bonds of each such series shall be redeemable at
any time and from time to time, prior to maturity, upon notice given by mailing
the same, by first class mail postage prepaid, not less than thirty nor more
than forty-five days prior to the date fixed for redemption to each registered
holder of a bond to be redeemed (in whole or in part) at the last address of
such holder appearing on the registry books, at the principal amount thereof and
accrued interest thereon, if any, to the date fixed for redemption, if redeemed
by the operation of Section 4 of the Supplemental Indenture dated as of November
1, 1962 or of the improvement fund provisions of any supplemental indenture or
by the use of proceeds of released property.
SECTION 2. The obligation of the Company to make payments with respect
to the principal of and premium, if any, and interest on the new First Series
Bonds shall be fully or partially, as the case may be, satisfied and discharged,
to the extent that, at the time that any such payment shall be due, the Company
shall have made payments as required by the Company's Note dated July 13, 1995
issued pursuant to Section 3.2 of the Loan Agreement dated as of July 1, 1995
between the Development Authority of Monroe County and the Company, relating to
the First Series Monroe Bonds (hereinafter defined), sufficient to pay fully or
partially the then due principal of and premium, if any, and interest on the
Development Authority of Monroe County (Georgia) Pollution Control Revenue Bonds
(Georgia Power Company Plant Scherer Project), First Series 1995 (hereinafter
referred to as the "First Series Monroe Bonds") or there shall be on deposit
with the trustee pursuant to the Trust Indenture dated as of July 1, 1995 of the
Development Authority of Monroe County to Bank South, Atlanta, Georgia, as
trustee, relating to the First Series Monroe Bonds (hereinafter referred to as
the "First Series Monroe Indenture"), sufficient available funds to pay fully or
partially the then due principal of and premium, if any, and interest on the
First Series Monroe Bonds. The Trustee may conclusively presume that the
obligation of the Company to make payments with respect to the principal of and
premium, if any, and interest on the new First Series Bonds shall have been
fully satisfied and discharged unless and until the Trustee shall have received
a written notice from the trustee under the First Series Monroe Indenture
stating (i) that timely payment of principal of or premium, if any, or interest
on the First Series Monroe Bonds has not been made, (ii) that there are not
sufficient available funds to make such payment and (iii) the amount of funds
required to make such payment.
In addition to the redemption as provided in Section 1 hereof, the new
First Series Bonds shall also be redeemable in whole upon receipt by the Trustee
of a written demand for the
-10-
<PAGE>
redemption of the new First Series Bonds (hereinafter called "First Series
Redemption Demand") from the trustee under the First Series Monroe Indenture
stating that the principal amount of all the First Series Monroe Bonds then
outstanding under the First Series Monroe Indenture has been declared
immediately due and payable pursuant to the provisions of Section 8.02 of the
First Series Monroe Indenture, specifying the date from which unpaid interest on
the First Series Monroe Bonds has then accrued and stating that such declaration
of maturity has not been rescinded. The Trustee shall within 10 days of
receiving the First Series Redemption Demand mail a copy thereof to the Company
stamped or otherwise marked to indicate the date of receipt by the Trustee. The
Company shall fix a redemption date for the redemption so demanded (herein
called the "First Series Demand Redemption") and shall mail to the Trustee
notice of such date at least 30 days prior thereto. The date fixed for First
Series Demand Redemption may be any day not more than 180 days after receipt by
the Trustee of the First Series Redemption Demand. If the Trustee does not
receive such notice from the Company within 150 days after receipt by the
Trustee of the First Series Redemption Demand, the date for First Series Demand
Redemption shall be deemed fixed at the 180th day after such receipt. The
Trustee shall mail notice of the date fixed for First Series Demand Redemption
(hereinafter called the "First Series Demand Redemption Notice") to the trustee
under the First Series Monroe Indenture (and the registered holders of the new
First Series Bonds if other than said trustee) not more than 10 nor less than 5
days prior to the date fixed for First Series Demand Redemption, provided,
however, that the Trustee shall mail no First Series Demand Redemption Notice
(and no First Series Demand Redemption shall be made) if prior to the mailing of
the First Series Demand Redemption Notice the Trustee shall have received
written notice of rescission of the First Series Redemption Demand from the
trustee under the First Series Monroe Indenture. First Series Demand Redemption
of the new First Series Bonds shall be at the principal amount thereof, plus
accrued interest thereon to the date fixed for redemption, and such amount shall
become and be due and payable on the date fixed for First Series Demand
Redemption as above provided. Anything in this paragraph contained to the
contrary notwithstanding, if, after mailing of the First Series Demand
Redemption Notice and prior to the date fixed for First Series Demand
Redemption, the Trustee shall have been advised in writing by the trustee under
the First Series Monroe Indenture that the First Series Redemption Demand has
been rescinded, the First Series Demand Redemption Notice shall thereupon,
without further act of the Trustee or the Company, be rescinded and become null
and void for all purposes hereunder and no redemption of the new First Series
Bonds and no payments in
-11-
<PAGE>
respect thereof as specified in the First Series Demand Redemption Notice shall
be effected or required.
The new First Series Bonds shall also be redeemable in whole at any
time, or in part from time to time (hereinafter called the "First Series Regular
Redemption"), upon receipt by the Trustee of a written demand (hereinafter
referred to as the "First Series Regular Redemption Demand") from the trustee
under the First Series Monroe Indenture stating: (1) the principal amount of
First Series Monroe Bonds to be redeemed pursuant to the optional redemption
provisions of the First Series Monroe Bonds and the First Series Monroe
Indenture; (2) the date of such redemption and that notice thereof has been
given as required by the First Series Monroe Indenture; (3) that the Trustee
shall call for redemption on the stated date fixed for redemption of the First
Series Monroe Bonds a principal amount of the new First Series Bonds equal to
the principal amount of First Series Monroe Bonds to be redeemed; and (4) that
the trustee under the First Series Monroe Indenture, as holder of all the new
First Series Bonds then outstanding, waives notice of such redemption. The
Trustee may conclusively presume the statements contained in the First Series
Regular Redemption Demand to be correct. First Series Regular Redemption of the
new First Series Bonds shall be at the principal amount thereof and accrued
interest thereon to the date fixed for redemption, together with a premium equal
to the redemption premium (if any) payable upon such redemption of the First
Series Monroe Bonds, and such amount shall become and be due and, subject to the
first paragraph of this Section 2, payable on the date fixed for such First
Series Regular Redemption, which shall be the date specified pursuant to item
(2) of the First Series Regular Redemption Demand as above provided.
SECTION 3. The obligation of the Company to make payments with respect
to the principal of and premium, if any, and interest on the new Second Series
Bonds shall be fully or partially, as the case may be, satisfied and discharged,
to the extent that, at the time that any such payment shall be due, the Company
shall have made payments as required by the Company's Note dated July 13, 1995
issued pursuant to Section 3.2 of the Loan Agreement dated as of July 1, 1995
between the Development Authority of Monroe County and the Company, relating to
the Second Series Monroe Bonds (hereinafter defined), sufficient to pay fully or
partially the then due principal of and premium, if any, and interest on the
Development Authority of Monroe County (Georgia) Pollution Control Revenue Bonds
(Georgia Power Company Plant Scherer Project), Second Series 1995 (hereinafter
referred to as the "Second Series Monroe Bonds") or there shall be on deposit
with the trustee pursuant to the Trust Indenture dated as
-12-
<PAGE>
of July 1, 1995 of the Development Authority of Monroe County to Bank South,
Atlanta, Georgia, as trustee, relating to the Second Series Monroe Bonds
(hereinafter referred to as the "Second Series Monroe Indenture"), sufficient
available funds to pay fully or partially the then due principal of and premium,
if any, and interest on the Second Series Monroe Bonds. The Trustee may
conclusively presume that the obligation of the Company to make payments with
respect to the principal of and premium, if any, and interest on the new Second
Series Bonds shall have been fully satisfied and discharged unless and until the
Trustee shall have received a written notice from the trustee under the Second
Series Monroe Indenture stating (i) that timely payment of principal of or
premium, if any, or interest on the Second Series Monroe Bonds has not been
made, (ii) that there are not sufficient available funds to make such payment
and (iii) the amount of funds required to make such payment.
In addition to the redemption as provided in Section 1 hereof, the new
Second Series Bonds shall also be redeemable in whole upon receipt by the
Trustee of a written demand for the redemption of the new Second Series Bonds
(hereinafter called "Second Series Redemption Demand") from the trustee under
the Second Series Monroe Indenture stating that the principal amount of all the
Second Series Monroe Bonds then outstanding under the Second Series Monroe
Indenture has been declared immediately due and payable pursuant to the
provisions of Section 8.02 of the Second Series Monroe Indenture, specifying the
date from which unpaid interest on the Second Series Monroe Bonds has then
accrued and stating that such declaration of maturity has not been rescinded.
The Trustee shall within 10 days of receiving the Second Series Redemption
Demand mail a copy thereof to the Company stamped or otherwise marked to
indicate the date of receipt by the Trustee. The Company shall fix a redemption
date for the redemption so demanded (herein called the "Second Series Demand
Redemption") and shall mail to the Trustee notice of such date at least 30 days
prior thereto. The date fixed for Second Series Demand Redemption may be any day
not more than 180 days after receipt by the Trustee of the Second Series
Redemption Demand. If the Trustee does not receive such notice from the Company
within 150 days after receipt by the Trustee of the Second Series Redemption
Demand, the date for Second Series Demand Redemption shall be deemed fixed at
the 180th day after such receipt. The Trustee shall mail notice of the date
fixed for Second Series Demand Redemption (hereinafter called the "Second Series
Demand Redemption Notice") to the trustee under the Second Series Monroe
Indenture (and the registered holders of the new Second Series Bonds if other
than said trustee) not more than 10 nor less than 5 days prior to the date fixed
for Second Series Demand Redemption, provided, however, that the Trustee
-13-
<PAGE>
shall mail no Second Series Demand Redemption Notice (and no Second Series
Demand Redemption shall be made) if prior to the mailing of the Second Series
Demand Redemption Notice the Trustee shall have received written notice of
rescission of the Second Series Redemption Demand from the trustee under the
Second Series Monroe Indenture. Second Series Demand Redemption of the new
Second Series Bonds shall be at the principal amount thereof, plus accrued
interest thereon to the date fixed for redemption, and such amount shall become
and be due and payable on the date fixed for Second Series Demand Redemption as
above provided. Anything in this paragraph contained to the contrary
notwithstanding, if, after mailing of the Second Series Demand Redemption Notice
and prior to the date fixed for Second Series Demand Redemption, the Trustee
shall have been advised in writing by the trustee under the Second Series Monroe
Indenture that the Second Series Redemption Demand has been rescinded, the
Second Series Demand Redemption Notice shall thereupon, without further act of
the Trustee or the Company, be rescinded and become null and void for all
purposes hereunder and no redemption of the new Second Series Bonds and no
payments in respect thereof as specified in the Second Series Demand Redemption
Notice shall be effected or required.
The new Second Series Bonds shall also be redeemable in whole at any
time, or in part from time to time (hereinafter called the "Second Series
Regular Redemption"), upon receipt by the Trustee of a written demand
(hereinafter referred to as the "Second Series Regular Redemption Demand") from
the trustee under the Second Series Monroe Indenture stating: (1) the principal
amount of Second Series Monroe Bonds to be redeemed pursuant to the optional
redemption provisions of the Second Series Monroe Bonds and the Second Series
Monroe Indenture; (2) the date of such redemption and that notice thereof has
been given as required by the Second Series Monroe Indenture; (3) that the
Trustee shall call for redemption on the stated date fixed for redemption of the
Second Series Monroe Bonds a principal amount of the new Second Series Bonds
equal to the principal amount of Second Series Monroe Bonds to be redeemed; and
(4) that the trustee under the Second Series Monroe Indenture, as holder of all
the new Second Series Bonds then outstanding, waives notice of such redemption.
The Trustee may conclusively presume the statements contained in the Second
Series Regular Redemption Demand to be correct. Second Series Regular Redemption
of the new Second Series Bonds shall be at the principal amount thereof and
accrued interest thereon to the date fixed for redemption, together with a
premium equal to the redemption premium (if any) payable upon such redemption of
the Second Series Monroe Bonds, and such amount shall become and be due and,
subject to the first paragraph of this Section 3, payable on the date fixed for
such
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<PAGE>
Second Series Regular Redemption, which shall be the date specified pursuant to
item (2) of the Second Series Regular Redemption Demand as above provided.
SECTION 4. The Company covenants that the provisions of Section 4 of
the Supplemental Indenture dated as of November 1, 1962, shall be in full force
and effect so long as any new Bonds of any series shall be outstanding under the
Indenture.
SECTION 5. As supplemented by this Supplemental Indenture, the
Indenture is in all respects ratified and confirmed, and the Indenture and this
Supplemental Indenture shall be read, taken and construed as one and the same
instrument.
SECTION 6. Nothing in this Supplemental Indenture contained shall, or
shall be construed to, confer upon any person other than a holder of bonds
issued under the Indenture, as supplemented and amended, the Company and the
Trustee any right or interest to avail himself of any benefit under any
provision of the Indenture or of this Supplemental Indenture.
SECTION 7. The Trustee assumes no responsibility for or in respect of
the validity or sufficiency of this Supplemental Indenture or the due execution
hereof by the Company or for or in respect of the recitals and statements
contained herein, all of which recitals and statements are made solely by the
Company.
SECTION 8. This Supplemental Indenture may be executed in several
counterparts and all such counterparts executed and delivered, each as an
original, shall constitute but one and the same instrument.
SECTION 9. Although this Supplemental Indenture, for convenience and
for the purposes of reference, is dated as of the day and year first above
written, the actual dates of execution by the Company and the Trustee are as
indicated by their respective acknowledgments hereto annexed.
-15-
<PAGE>
IN WITNESS WHEREOF, said Georgia Power Company has caused this
Supplemental Indenture to be executed in its corporate name by its President or
one of its Vice Presidents and its corporate seal to be hereunto affixed and to
be attested by its Secretary or one of its Assistant Secretaries, and said
Chemical Bank, to evidence its acceptance hereof, has caused this Supplemental
Indenture to be executed in its corporate name by one of its Vice Presidents,
Senior Trust Officers or Trust Officers and its corporate seal to be hereunto
affixed and to be attested by one of its Senior Trust Officers, Trust Officers,
Assistant Trust Officers or Assistant Secretaries, in several counterparts, all
as of the day and year first above written.
GEORGIA POWER COMPANY
By:
Vice President
Attest:
Assistant Corporate Secretary
Signed, sealed and delivered this 6th day of July, 1995 by Georgia Power Company
in the County of Fulton, State of Georgia, in the presence of
Unofficial Witness
Notary Public, Walton County, Georgia
My Commission Expires August 2, 1996
(signatures continued on next page)
<PAGE>
CHEMICAL BANK
By:
Senior Trust Officer
Attest:
Senior Trust Officer
Signed, sealed and delivered this 7th day of July, 1995 by Chemical Bank in the
County of New York, State of New York, in the presence of
Unofficial Witness
EMILY FAYAN
Notary Public, State of New York
No. 24-4737006
Qualified in Kings County
Certificate filed in New York County
Commission Expires December 31, 1995
<PAGE>
STATE OF GEORGIA )
) SS.:
COUNTY OF FULTON )
On the 6th day of July, 1995, personally appeared before me Jane F.
Genske, a Notary Public in and for the State and County aforesaid, Angie K.
Page, who made oath and said that she was present and saw the corporate seal of
Georgia Power Company affixed to the above written instrument, that she saw Judy
M. Anderson, Vice President, with Cherry C. Hudgins, Assistant Corporate
Secretary, known to her to be such officers of said corporation respectively,
attest the same, and that she, deponent, with Jane F. Genske, witnessed the
execution and delivery of the said instrument as the free act and deed of said
Georgia Power Company.
Subscribed and sworn to )
before me this 6th day of )
July, 1995 )
Notary Public, Walton County, Georgia
My Commission Expires August 2, 1996
<PAGE>
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
On the 7th day of July, 1995, personally appeared before me Emily
Fayan, a Notary Public in and for the State and County aforesaid, K. Salmini,
who made oath and said that he was present and saw the corporate seal of
Chemical Bank affixed to the above written instrument, that he saw R. Lorenzen,
Senior Trust Officer, with L. O'Brien, Senior Trust Officer, known to him to be
such officers of said corporation respectively, attest the same, and that he,
deponent, with Emily Fayan, witnessed the execution and delivery of the said
instrument as the free act and deed of said Chemical Bank.
Subscribed and sworn to )
before me this 7th day of )
July, 1995 )
EMILY FAYAN
Notary Public, State of New York
No. 24-4737006
Qualified in Kings County
Certificate filed in New York County
Commission Expires December 31, 1995
<PAGE>
STATE OF GEORGIA )
) SS.:
COUNTY OF FULTON )
On the 6th day of July, in the year one thousand nine hundred and
ninety-five, before me personally came Judy M. Anderson, to me known, who, being
by me duly sworn, did depose and say that she resides at 199 14th Street, N.E.,
Atlanta, Georgia; that she is a Vice President of Georgia Power Company, one of
the corporations described in and which executed the foregoing instrument; that
she knows the seal of said corporation; that the seal affixed to said instrument
is such corporate seal; that it was so affixed by order of the Board of
Directors of said corporation; and that she signed her name thereto by like
order.
Notary Public, Walton
County, Georgia
My Commission Expires
August 2, 1996
<PAGE>
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
On the 7th day of July, in the year one thousand nine hundred and
ninety-five, before me personally came R. Lorenzen, to me known, who, being by
me duly sworn, did depose and say that he resides at 27 White Street, Valley
Stream, New York; that he is a Senior Trust Officer of Chemical Bank, one of the
corporations described in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by order of the Board of Directors
of said corporation; and that he signed his name thereto by like order.
EMILY FAYAN
Notary Public, State of
New York
No. 24-4737006
Qualified in Kings County
Certificate filed in New
York County
Commission Expires
December 31, 1995
<PAGE>
STATE OF GEORGIA )
) SS.:
COUNTY OF FULTON )
On the 6th day of July, 1995, before me appeared Judy M. Anderson, to
me personally known, who, being by me duly sworn, did say that she is a Vice
President of Georgia Power Company, and that the seal affixed to said instrument
is the corporate seal of said corporation and that said instrument was signed
and sealed in behalf of said corporation by authority of its Board of Directors,
and that said Judy M. Anderson acknowledged said instrument to be the free act
and deed of said corporation.
Given under my hand this 6th day of July, 1995.
Notary Public, Walton
County, Georgia
My Commission Expires
August 2, 1996
<PAGE>
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
On the 7th day of July, 1995, before me appeared R. Lorenzen, to me
personally known, who, being by me duly sworn, did say that he is a Senior Trust
Officer of Chemical Bank, and that the seal affixed to said instrument is the
corporate seal of said corporation and that said instrument was signed and
sealed in behalf of said corporation by authority of its Board of Directors, and
that said R. Lorenzen acknowledged said instrument to be the free act and deed
of said corporation.
Given under my hand this 7th day of July, 1995.
EMILY FAYAN
Notary Public, State of
New York
No. 24-4737006
Qualified in Kings County
Certificate filed in New
York County
Commission Expires
December 31, 1995
<PAGE>
Exhibit 4(c)3
GEORGIA POWER COMPANY
to
CHEMICAL BANK
(Successor by Merger to Chemical Bank New York Trust
Company and The New York Trust Company),
Trustee
SECOND SUPPLEMENTAL INDENTURE
Dated as of July 1, 1995
Providing among other things for
FIRST MORTGAGE BONDS
6% Pollution Control Series due July 1, 2025
<PAGE>
SECOND SUPPLEMENTAL INDENTURE, dated as of July 1, 1995, made and
entered into by and between GEORGIA POWER COMPANY, a corporation organized and
existing under the laws of the State of Georgia with its principal office in
Atlanta, Fulton County, Georgia (hereinafter commonly referred to as the
"Company"), and CHEMICAL BANK (successor by merger to Chemical Bank New York
Trust Company and The New York Trust Company), a corporation organized and
existing under the laws of the State of New York, with its principal corporate
trust office in the Borough of Manhattan, The City of New York (hereinafter
commonly referred to as the "Trustee"), as Trustee under the Indenture dated as
of March 1, 1941 originally entered into between the Company and The New York
Trust Company, as Trustee (hereinafter sometimes referred to as the "Original
Indenture" and said The New York Trust Company being hereinafter sometimes
referred to as the "Original Trustee"), securing bonds issued and to be issued
as provided therein, which Original Indenture has heretofore been supplemented
and amended by various supplemental indentures (which Original Indenture as so
supplemented and amended is hereinafter sometimes referred to as the
"Indenture").
WHEREAS the Company and the Original Trustee have executed and
delivered the Original Indenture for the purpose of securing an issue of bonds
of the 3-1/2% Series due 1971 described therein and such additional bonds as may
from time to time be issued under and in accordance with the terms of the
Indenture, the aggregate principal amount of bonds to be secured thereby being
presently limited to $5,000,000,000 at any one time outstanding (except as
provided in Section 2.01 of the Indenture), and the Original Indenture is of
record in the public office of each county in the States of Georgia, Alabama,
Tennessee and South Carolina, and in the public office of the District of
Columbia, in which this Supplemental Indenture is to be recorded, and the
Original Indenture is on file at the principal corporate trust office of the
Trustee; and
WHEREAS the Company and the Trustee have executed and delivered various
supplemental indentures for the purpose, among others, of further securing said
bonds and of creating the bonds of other series described therein, which
supplemental indentures described and set forth additional property conveyed
thereby and are also of record in the public offices of some or all of the
counties in the States of Georgia, Alabama, Tennessee and South Carolina in
which this Supplemental Indenture is to be recorded, and one of which
supplemental indentures is also of record in the public office of the District
of Columbia, and said supplemental indentures are also on file at the principal
corporate trust office of the Trustee; and
WHEREAS the Company and the Trustee have executed and delivered the
Supplemental Indenture dated as of May 15, 1991, by which the third paragraph of
Section 1.02 of the Indenture was amended to read as follows:
<PAGE>
"The term 'Board of Directors' shall mean the Board of
Directors of the Company or any committee of the Board of Directors of
the Company authorized, with respect to any particular matter, to
exercise the power of the Board of Directors of the Company."; and
WHEREAS the Indenture provides for the issuance of bonds thereunder in
one or more series and the Company, by appropriate corporate action in
conformity with the terms of the Indenture, has duly determined to create a
series of bonds under the Indenture to be designated as "6% Pollution Control
Series due July 1, 2025" (hereinafter sometimes referred to as the "new Bonds"),
each of which bonds shall also bear the descriptive title "First Mortgage Bond",
the bonds of such series to bear interest at the annual rate and to mature on
the date designated in the title thereof; and
WHEREAS by a Plan of Merger dated June 11, 1959, effective September 8,
1959, between The New York Trust Company and Chemical Corn Exchange Bank, said
The New York Trust Company was merged into said Chemical Corn Exchange Bank
which continued under the name and style of Chemical Bank New York Trust
Company; and by a Plan of Merger dated November 26, 1968, effective February 17,
1969, among Chemical New York Corporation, Chemical Bank New York Trust Company
and Chemical Bank, said Chemical Bank New York Trust Company was merged into
said Chemical Bank which continued under the name and style of Chemical Bank;
and by virtue of said mergers Chemical Bank has become successor to The New York
Trust Company and Chemical Bank New York Trust Company, as Trustee under the
Indenture, and has become vested with all of the title to the mortgaged property
and trust estate; and with the trusts, powers, discretions, immunities,
privileges and all other matters as were vested in said The New York Trust
Company and said Chemical Bank New York Trust Company under the Indenture, with
like effect as if originally named as Trustee therein; and
WHEREAS each of the new Bonds is to be substantially in the following
form, with appropriate insertions and deletions, to wit:
-2-
<PAGE>
[FORM OF NEW BOND]
GEORGIA POWER COMPANY
FIRST MORTGAGE BOND, 6% POLLUTION CONTROL SERIES
DUE JULY 1, 2025
No. $
Georgia Power Company, a Georgia corporation (hereinafter called the
"Company"), for value received, hereby promises to pay to Bank South, Atlanta,
Georgia (as trustee under a Trust Indenture dated as of July 1, 1995 of the
Development Authority of Monroe County, relating to the Revenue Bonds
(hereinafter mentioned)), or registered assigns, the principal sum of
_____________________ Dollars on July 1, 2025, and to pay to the registered
owner hereof interest on said sum from the latest semi-annual interest payment
date to which interest has been paid on the bonds of this series preceding the
date hereof, unless the date hereof be an interest payment date to which
interest is being paid, in which case from the date hereof, or unless the date
hereof is prior to January 1, 1996, in which case from July 1, 1995, at the rate
per annum, until the principal hereof shall have become due and payable,
specified in the title of this bond, payable on January 1 and July 1 in each
year.
The obligation of the Company to make payments with respect to the
principal of and premium, if any, and interest on bonds of this series shall be
fully or partially, as the case may be, satisfied and discharged to the extent
that, at any time that any such payment shall be due, the Company shall have
made payments as required by the Company's Note dated July 26, 1995 issued
pursuant to Section 3.2 of the Loan Agreement dated as of July 1, 1995 between
the Development Authority of Monroe County and the Company, relating to the
Revenue Bonds (hereinafter mentioned), sufficient to pay fully or partially the
then due principal of and premium, if any, and interest on the Development
Authority of Monroe County (Georgia) Pollution Control Revenue Bonds (Georgia
Power Company Plant Scherer Project), Third Series 1995 (hereinafter referred to
as "Revenue Bonds") or there shall be in the Bond Fund established pursuant to
the Trust Indenture dated as of July 1, 1995 of the Development Authority of
Monroe County to Bank South, Atlanta, Georgia, as trustee, relating to the
Revenue Bonds (hereinafter referred to as the "Revenue Indenture"), sufficient
available funds to pay fully or partially the then due principal of and premium,
if any, and interest on the Revenue Bonds.
-3-
<PAGE>
This bond is one of the bonds issued and to be issued from time to time
under and in accordance with and all secured by an indenture of mortgage or deed
of trust dated as of March 1, 1941 given by the Company to The New York Trust
Company, to which Chemical Bank is successor by merger (hereinafter sometimes
referred to as the "Trustee"), as Trustee, and indentures supplemental thereto,
to which indenture and indentures supplemental thereto (hereinafter referred to
collectively as the "Indenture") reference is hereby made for a description of
the property mortgaged and pledged, the nature and extent of the security and
the rights, duties and immunities thereunder of the Trustee and the rights of
the holders of said bonds and of the Trustee and of the Company in respect of
such security. By the terms of the Indenture the bonds to be secured thereby are
issuable in series which may vary as to date, amount, date of maturity, rate of
interest and in other respects as in the Indenture provided.
Upon notice given by mailing the same, by first class mail postage
prepaid, not less than thirty nor more than forty-five days prior to the date
fixed for redemption to each registered holder of a bond to be redeemed (in
whole or in part) at the last address of such holder appearing on the registry
books, any or all of the bonds of this series may be redeemed by the Company at
any time and from time to time by the payment of the principal amount thereof
and accrued interest thereon to the date fixed for redemption, if redeemed by
the operation of the improvement fund or the replacement fund provisions of the
Indenture or by the use of proceeds of released property, as more fully set
forth in the Indenture.
In the manner provided in the Indenture, the bonds of this series shall
also be redeemable in whole, by payment of the principal amount thereof plus
accrued interest thereon to the date fixed for redemption, upon receipt by the
Trustee of a written demand from the trustee under the Revenue Indenture stating
that the principal amount of all the Revenue Bonds then outstanding under the
Revenue Indenture has been declared immediately due and payable pursuant to the
provisions of Section 8.02 of the Revenue Indenture. As provided in the
Indenture, the date fixed for such redemption may be not more than 180 days
after receipt by the Trustee of the aforesaid written demand and shall be
specified in a notice of redemption given not more than 10 nor less than 5 days
prior to the date so fixed for such redemption. As in the Indenture provided,
such notice of redemption shall be rescinded and become null and void for all
purposes under the Indenture upon rescission of the aforesaid written demand or
the aforesaid declaration of maturity under the Revenue Indenture, and thereupon
no redemption of the bonds of this series and no payments in respect thereof as
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<PAGE>
specified in such notice of redemption shall be effected or
required.
In the manner provided in the Indenture, the bonds of this series are
also redeemable in whole or in part upon receipt by the Trustee of a written
demand from the trustee under the Revenue Indenture specifying a principal
amount of Revenue Bonds which have been called for redemption pursuant to the
third paragraph of Section 3.01 of the Revenue Indenture. As provided in the
Indenture, bonds of this series equal in principal amount to the principal
amount of such Revenue Bonds to be redeemed will be redeemed on the date fixed
for redemption of the Revenue Bonds at the principal amount of such bonds of
this series and accrued interest thereon to the date fixed for redemption,
together with a premium equal to a percentage of the principal amount thereof
determined as set forth in the following tabulation:
If Redeemed During the Twelve Months'
Period Ending the Last Day of June
Regular
Redemption
Year Premium
2001 2%
2002 1%
and without premium if redeemed on or after July 1, 2002.
In case of certain defaults as specified in the Indenture, the
principal of this bond may be declared or may become due and payable on the
conditions, at the time, in the manner and with the effect provided in the
Indenture.
No recourse shall be had for the payment of the principal of or
premium, if any, or interest on this bond, or for any claim based hereon, or
otherwise in respect hereof or of the Indenture, to or against any incorporator,
stockholder, director or officer, past, present or future, as such, of the
Company, or of any predecessor or successor company, either directly or through
the Company, or such predecessor or successor company, under any constitution or
statute or rule of law, or by the enforcement of any assessment or penalty, or
otherwise, all such liability of incorporators, stockholders, directors and
officers being waived and released by the holder and owner hereof by the
acceptance of this bond and being likewise waived and released by the terms of
the Indenture.
-5-
<PAGE>
This bond is transferable by the registered owner hereof, in person or
by attorney duly authorized, at the principal corporate trust office of the
Trustee, in the Borough of Manhattan, The City of New York, but only in the
manner prescribed in the Indenture, upon the surrender and cancellation of this
bond, and upon any such transfer a new registered bond or bonds, without
coupons, of the same series and maturity date and for the same aggregate
principal amount, in authorized denominations, will be issued to the transferee
in exchange herefor. The Company and the Trustee may deem and treat the person
in whose name this bond is registered as the absolute owner for the purpose of
receiving payment of or on account of the principal, premium, if any, and
interest due hereon and for all other purposes. Registered bonds of this series
shall be exchangeable for registered bonds of other authorized denominations
having the same aggregate principal amount, in the manner and upon the
conditions prescribed in the Indenture. However, notwithstanding the provisions
of the Indenture, no charge shall be made upon any transfer or exchange of bonds
of this series other than for any tax or taxes or other governmental charge
required to be paid by the Company.
This bond shall not be valid or become obligatory for any purpose
unless and until it shall have been authenticated by the execution by the
Trustee or its successor in trust under the Indenture of the certificate hereon.
IN WITNESS WHEREOF, Georgia Power Company has caused this bond to be
executed in its name by its President or one of its Vice Presidents by his
signature or a facsimile thereof, and its corporate seal or a facsimile thereof
to be hereto affixed and attested by its Secretary or one of its Assistant
Secretaries by his signature or a facsimile thereof.
Dated,
GEORGIA POWER COMPANY
By:
Attest:
-6-
<PAGE>
TRUSTEE'S CERTIFICATE
This bond is one of the bonds, of the series designated therein,
described in the within-mentioned Indenture.
CHEMICAL BANK, as Trustee
By:
Authorized Officer
AND WHEREAS all acts and things necessary to make the new Bonds, when
authenticated by the Trustee and issued as in the Indenture and this
Supplemental Indenture provided, the valid, binding and legal obligations of the
Company, and to constitute the Indenture and this Supplemental Indenture valid,
binding and legal instruments for the security thereof, have been done and
performed, and the creation, execution and delivery of the Indenture and this
Supplemental Indenture and the creation, execution and issue of bonds subject to
the terms hereof and of the Indenture, have in all respects been duly
authorized;
NOW, THEREFORE, in consideration of the premises, and of the acceptance
and purchase by the holders thereof of the bonds issued and to be issued under
the Indenture and of the sum of One Dollar duly paid by the Trustee to the
Company, and of other good and valuable considerations, the receipt whereof is
hereby acknowledged, and for the purpose of further securing the due and
punctual payment of the principal of and premium, if any, and interest on the
bonds issued and now outstanding under the Indenture, and the $71,580,000
principal amount of new Bonds proposed to be issued and all other bonds which
shall be issued under the Indenture, or the Indenture as supplemented and
amended, and for the purpose of further securing the faithful performance and
observance of all covenants and conditions therein and in any indenture
supplemental thereto set forth, the Company has given, granted, bargained, sold,
transferred, assigned, hypothecated, pledged, mortgaged, warranted, aliened and
conveyed and by these presents does give, grant, bargain, sell, transfer,
assign, hypothecate, pledge, mortgage, warrant, alien and convey unto Chemical
Bank, as Trustee, as provided in the Indenture, and its successor or successors
in the trust thereby and hereby created, and to its or their assigns forever,
all the right, title and interest of the Company in and to all premises,
property, franchises and rights of every kind and description, real, personal
and mixed, tangible and intangible, now owned or hereafter acquired by the
Company (excepting,
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<PAGE>
however, that which is by the Indenture expressly reserved from the lien and
effect thereof).
TOGETHER WITH all and singular the tenements, hereditaments and
appurtenances belonging or in anywise appertaining to the property, rights and
franchises or any thereof, referred to in the foregoing granting clauses, with
the reversion and reversions, remainder and remainders and (subject to the
provisions of Article X of the Indenture) the tolls, rents, revenues, issues,
earnings, income, products and profits thereof, and all the estate, right, title
and interest and claim whatsoever, at law as well as in equity, which the
Company now has or may hereafter acquire in and to the aforesaid property,
rights and franchises and every part and parcel thereof.
TO HAVE AND TO HOLD all said property, rights and franchises hereby
conveyed, assigned, pledged or mortgaged, or intended so to be, unto the
Trustee, its successor or successors in trust, and their assigns forever;
BUT IN TRUST, NEVERTHELESS, with power of sale, for the equal and
proportionate benefit and security of the holders of all bonds and interest
coupons now or hereafter issued under the Indenture, as supplemented and
amended, pursuant to the provisions thereof, and for the enforcement of the
payment of said bonds and coupons when payable and for the performance of and
compliance with the covenants and conditions of the Indenture, as supplemented
and amended, without any preference, distinction or priority as to lien or
otherwise of any bond or bonds over others by reason of the difference in time
of the actual issue, sale or negotiation thereof or for any other reason
whatsoever, except as otherwise expressly provided in the Indenture, as
supplemented and amended; and so that each and every bond now or hereafter
issued thereunder shall have the same lien; and so that the principal of and
premium, if any, and interest on every such bond shall, subject to the terms
thereof, be equally and proportionately secured thereby and hereby, as if it had
been made, executed, delivered, sold and negotiated simultaneously with the
execution and delivery of the Original Indenture.
AND IT IS EXPRESSLY DECLARED that all bonds issued and secured under
the Indenture and hereunder are to be issued, authenticated and delivered, and
all said property, rights and franchises hereby and by the Indenture conveyed,
assigned, pledged or mortgaged, or intended so to be (including all the right,
title and interest of the Company in and to any and all premises, property,
franchises and rights of every kind and description, real, personal and mixed,
tangible and intangible,
-8-
<PAGE>
thereafter acquired by the Company and whether or not specifically described in
the Original Indenture or in any indenture supplemental thereto, except any
therein expressly excepted), are to be dealt with and disposed of, under, upon
and subject to the terms, conditions, stipulations, covenants, agreements,
trusts and uses and purposes expressed in the Indenture and herein, and it is
hereby agreed as follows:
SECTION 1. There is hereby created a series of bonds designated as
hereinabove in the fourth Whereas clause set forth, each of which shall contain
suitable provisions with respect to the matters hereinafter in this Section
specified, and the form thereof shall be substantially as hereinbefore set
forth. New Bonds shall mature on the date specified in the title thereof, and
the definitive bonds of such series may be issued only as registered bonds
without coupons. New Bonds shall be in such denominations as the Board of
Directors shall approve, and execution and delivery to the Trustee for
authentication shall be conclusive evidence of such approval. The serial numbers
of new Bonds shall be such as may be approved by any officer of the Company, the
execution thereof by any such officer to be conclusive evidence of such
approval.
New Bonds, until the principal thereof shall have become due and
payable, shall bear interest at the annual rate designated in the title thereof,
payable semi-annually on January 1 and July 1 in each year, commencing January
1, 1996. New Bonds shall be dated the date of authentication.
The principal of and premium, if any, and interest on the new Bonds
shall be payable in any coin or currency of the United States of America which
at the time of payment is legal tender for public and private debts, at the
office or agency of the Company in the Borough of Manhattan, The City of New
York, designated for that purpose.
New Bonds may be transferred at the principal corporate trust office of
the Trustee, in the Borough of Manhattan, The City of New York. New Bonds shall
be exchangeable for other bonds of the same series, in the manner and upon the
conditions prescribed in the Indenture, upon the surrender of such new Bonds at
said principal corporate trust office of the Trustee. However, notwithstanding
the provisions of Section 2.05 of the Indenture, no charge shall be made upon
any transfer or exchange of new Bonds other than for any tax or taxes or other
governmental charge required to be paid by the Company.
Any or all of the new Bonds shall be redeemable at any time and from
time to time, prior to maturity, upon notice given by
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<PAGE>
mailing the same, by first class mail postage prepaid, not less than thirty nor
more than forty-five days prior to the date fixed for redemption to each
registered holder of a bond to be redeemed (in whole or in part) at the last
address of such holder appearing on the registry books, at the principal amount
thereof and accrued interest thereon, if any, to the date fixed for redemption,
if redeemed by the operation of Section 4 of the Supplemental Indenture dated as
of November 1, 1962 or of the improvement fund provisions of any supplemental
indenture or by the use of proceeds of released property.
SECTION 2. The obligation of the Company to make payments with respect
to the principal of and premium, if any, and interest on the new Bonds shall be
fully or partially, as the case may be, satisfied and discharged, to the extent
that, at the time that any such payment shall be due, the Company shall have
made payments as required by the Company's Note dated July 26, 1995 issued
pursuant to Section 3.2 of the Loan Agreement dated as of July 1, 1995 between
the Development Authority of Monroe County and the Company, relating to the
Monroe Bonds (hereinafter defined), sufficient to pay fully or partially the
then due principal of and premium, if any, and interest on the Development
Authority of Monroe County (Georgia) Pollution Control Revenue Bonds (Georgia
Power Company Plant Scherer Project), Third Series 1995 (hereinafter referred to
as the "Monroe Bonds") or there shall be in the related Bond Fund established
pursuant to the Trust Indenture dated as of July 1, 1995 of the Development
Authority of Monroe County to Bank South, Atlanta, Georgia, as trustee, relating
to the Monroe Bonds (hereinafter referred to as the "Monroe Indenture"),
sufficient available funds to pay fully or partially the then due principal of
and premium, if any, and interest on the Monroe Bonds. The Trustee may
conclusively presume that the obligation of the Company to make payments with
respect to the principal of and premium, if any, and interest on the new Bonds
shall have been fully satisfied and discharged unless and until the Trustee
shall have received a written notice from the trustee under the Monroe Indenture
stating (i) that timely payment of principal of or premium, if any, or interest
on the Monroe Bonds has not been made, (ii) that there are not sufficient
available funds in such Bond Fund to make such payment and (iii) the amount of
funds required to make such payment.
In addition to the redemption as provided in Section 1 hereof, the new
Bonds shall also be redeemable in whole upon receipt by the Trustee of a written
demand for the redemption of the new Bonds (hereinafter called "Redemption
Demand") from the trustee under the Monroe Indenture stating that the principal
amount of all the Monroe Bonds then outstanding under the Monroe Indenture has
been declared immediately due and payable pursuant to the provisions of Section
8.02 of the Monroe Indenture, specifying the date from which unpaid interest on
the Monroe Bonds has then accrued and stating that such declaration of
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<PAGE>
maturity has not been rescinded. The Trustee shall within 10 days of receiving
the Redemption Demand mail a copy thereof to the Company stamped or otherwise
marked to indicate the date of receipt by the Trustee. The Company shall fix a
redemption date for the redemption so demanded (herein called the "Demand
Redemption") and shall mail to the Trustee notice of such date at least 30 days
prior thereto. The date fixed for Demand Redemption may be any day not more than
180 days after receipt by the Trustee of the Redemption Demand. If the Trustee
does not receive such notice from the Company within 150 days after receipt by
the Trustee of the Redemption Demand, the date for Demand Redemption shall be
deemed fixed at the 180th day after such receipt. The Trustee shall mail notice
of the date fixed for Demand Redemption (hereinafter called the "Demand
Redemption Notice") to the trustee under the Monroe Indenture (and the
registered holders of the new Bonds if other than said trustee) not more than 10
nor less than 5 days prior to the date fixed for Demand Redemption, provided,
however, that the Trustee shall mail no Demand Redemption Notice (and no Demand
Redemption shall be made) if prior to the mailing of the Demand Redemption
Notice the Trustee shall have received written notice of rescission of the
Redemption Demand from the trustee under the Monroe Indenture. Demand Redemption
of the new Bonds shall be at the principal amount thereof, plus accrued interest
thereon to the date fixed for redemption, and such amount shall become and be
due and payable on the date fixed for Demand Redemption as above provided.
Anything in this paragraph contained to the contrary notwithstanding, if, after
mailing of the Demand Redemption Notice and prior to the date fixed for Demand
Redemption, the Trustee shall have been advised in writing by the trustee under
the Monroe Indenture that the Redemption Demand has been rescinded, the Demand
Redemption Notice shall thereupon, without further act of the Trustee or the
Company, be rescinded and become null and void for all purposes hereunder and no
redemption of the new Bonds and no payments in respect thereof as specified in
the Demand Redemption Notice shall be effected or required.
The new Bonds shall also be redeemable in whole at any time, or in part
from time to time (hereinafter called the "Regular Redemption"), upon receipt by
the Trustee of a written demand (hereinafter referred to as the "Regular
Redemption Demand") from the trustee under the Monroe Indenture stating: (1) the
principal amount of Monroe Bonds to be redeemed pursuant to the third paragraph
of Section 3.01 of the Monroe Indenture; (2) the date of such redemption and
that notice thereof has been given as required by the Monroe Indenture; (3) that
the Trustee shall call for redemption on the stated date fixed for redemption of
the Monroe Bonds a principal amount of the new Bonds equal to the principal
amount of Monroe Bonds to be redeemed; and (4) that the trustee under the Monroe
Indenture, as holder of all the new Bonds then outstanding, waives notice of
such redemption. The Trustee may conclusively presume the statements contained
in the
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<PAGE>
Regular Redemption Demand to be correct. Regular Redemption of the new Bonds
shall be at the principal amount thereof and accrued interest thereon to the
date fixed for redemption, together with a premium equal to a percentage of the
principal amount thereof determined as set forth in the tabulation appearing in
the form of the bond hereinbefore set forth, and such amount shall become and be
due and payable, subject to the first paragraph of this Section 2, on the date
fixed for such Regular Redemption, which shall be the date specified pursuant to
item (2) of the Regular Redemption Demand as above provided.
SECTION 3. The Company covenants that the provisions of Section 4 of
the Supplemental Indenture dated as of November 1, 1962, shall be in full force
and effect so long as any new Bonds shall be outstanding under the Indenture.
SECTION 4. As supplemented by this Supplemental Indenture, the
Indenture is in all respects ratified and confirmed, and the Indenture and this
Supplemental Indenture shall be read, taken and construed as one and the same
instrument.
SECTION 5. Nothing in this Supplemental Indenture contained shall, or
shall be construed to, confer upon any person other than a holder of bonds
issued under the Indenture, as supplemented and amended, the Company and the
Trustee any right or interest to avail himself of any benefit under any
provision of the Indenture or of this Supplemental Indenture.
SECTION 6. The Trustee assumes no responsibility for or in respect of
the validity or sufficiency of this Supplemental Indenture or the due execution
hereof by the Company or for or in respect of the recitals and statements
contained herein, all of which recitals and statements are made solely by the
Company.
SECTION 7. This Supplemental Indenture may be executed in several
counterparts and all such counterparts executed and delivered, each as an
original, shall constitute but one and the same instrument.
SECTION 8. Although this Supplemental Indenture, for convenience and
for the purposes of reference, is dated as of the day and year first above
written, the actual dates of execution by the Company and the Trustee are as
indicated by their respective acknowledgments hereto annexed.
<PAGE>
IN WITNESS WHEREOF, said Georgia Power Company has caused this
Supplemental Indenture to be executed in its corporate name by its President or
one of its Vice Presidents and its corporate seal to be hereunto affixed and to
be attested by its Secretary or one of its Assistant Secretaries, and said
Chemical Bank, to evidence its acceptance hereof, has caused this Supplemental
Indenture to be executed in its corporate name by one of its Vice Presidents,
Senior Trust Officers or Trust Officers and its corporate seal to be hereunto
affixed and to be attested by one of its Senior Trust Officers, Trust Officers,
Assistant Trust Officers or Assistant Secretaries, in several counterparts, all
as of the day and year first above written.
GEORGIA POWER COMPANY
By:
Vice President
Attest:
Assistant Corporate Secretary
Signed, sealed and delivered this 21st day of July, 1995 by Georgia Power
Company in the County of Fulton, State of Georgia, in the presence of
Unofficial Witness
Notary Public, Henry County, Georgia
My Commission Expires April 20, 1999
(signatures continued on next page)
<PAGE>
CHEMICAL BANK
By:
Vice President
Attest:
Senior Trust Officer
Signed, sealed and delivered this 24th day of July, 1995 by Chemical Bank in the
County of New York, State of New York, in the presence of
Unofficial Witness
ANNABELLE DELUCA
Notary Public, State of New York
No. 01 DE 5013759
Qualified in Kings County
Certificate filed in New York County
Commission Expires July 15, 1997
<PAGE>
STATE OF GEORGIA )
) SS.:
COUNTY OF FULTON )
On the 21st day of July, 1995, personally appeared before me Angela K.
Page, a Notary Public in and for the State and County aforesaid, Jane F. Genske,
who made oath and said that she was present and saw the corporate seal of
Georgia Power Company affixed to the above written instrument, that she saw Judy
M. Anderson, Vice President, with Cherry C. Hudgins, Assistant Corporate
Secretary, known to her to be such officers of said corporation respectively,
attest the same, and that she, deponent, with Angela K. Page witnessed the
execution and delivery of the said instrument as the free act and deed of said
Georgia Power Company.
Subscribed and sworn to )
before me this 21st day of )
July, 1995 )
Notary Public, Henry County, Georgia
My Commission Expires April 20, 1999
<PAGE>
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
On the 24th day of July, 1995, personally appeared before me Annabelle
DeLuca, a Notary Public in and for the State and County aforesaid, K. Salmini,
who made oath and said that he was present and saw the corporate seal of
Chemical Bank affixed to the above written instrument, that he saw G. McFarlane,
Vice President, with L. O'Brien, Senior Trust Officer, known to him to be such
officers of said corporation respectively, attest the same, and that he,
deponent, with Annabelle DeLuca, witnessed the execution and delivery of the
said instrument as the free act and deed of said Chemical Bank.
Subscribed and sworn to )
before me this 24th day of )
July, 1995 )
ANNABELLE DELUCA
Notary Public, State of New York
No. 01 DE 5013759
Qualified in Kings County
Certificate filed in New York County
Commission Expires July 15, 1997
<PAGE>
STATE OF GEORGIA )
) SS.:
COUNTY OF FULTON )
On the 21st day of July, in the year one thousand nine hundred and
ninety-five, before me personally came Judy M. Anderson, to me known, who, being
by me duly sworn, did depose and say that she resides at 199 14th Street, N.E.,
Atlanta, Georgia; that she is a Vice President of Georgia Power Company, one of
the corporations described in and which executed the foregoing instrument; that
she knows the seal of said corporation; that the seal affixed to said instrument
is such corporate seal; that it was so affixed by order of the Board of
Directors of said corporation; and that she signed her name thereto by like
order.
Notary Public, Henry
County, Georgia
My Commission Expires
April 20, 1999
<PAGE>
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
On the 24th day of July, in the year one thousand nine hundred and
ninety-five, before me personally came G. McFarlane, to me known, who, being by
me duly sworn, did depose and say that he resides at 1678 N. Gardiner Drive,
Bayshore, New York; that he is a Vice President of Chemical Bank, one of the
corporations described in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by order of the Board of Directors
of said corporation; and that he signed his name thereto by like order.
ANNABELLE DELUCA
Notary Public, State of
New York
No. 01 DE 5013759
Qualified in Kings County
Certificate filed in New
York County
Commission Expires
July 15, 1997
<PAGE>
STATE OF GEORGIA )
) SS.:
COUNTY OF FULTON )
On the 21st day of July, 1995, before me appeared Judy M. Anderson, to
me personally known, who, being by me duly sworn, did say that she is a Vice
President of Georgia Power Company, and that the seal affixed to said instrument
is the corporate seal of said corporation and that said instrument was signed
and sealed in behalf of said corporation by authority of its Board of Directors,
and that said Judy M. Anderson acknowledged said instrument to be the free act
and deed of said corporation.
Given under my hand this 21st day of July, 1995.
Notary Public, Henry
County, Georgia
My Commission Expires
April 20, 1999
<PAGE>
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
On the 24th day of July, 1995, before me appeared G. McFarlane, to me
personally known, who, being by me duly sworn, did say that he is a Vice
President of Chemical Bank, and that the seal affixed to said instrument is the
corporate seal of said corporation and that said instrument was signed and
sealed in behalf of said corporation by authority of its Board of Directors, and
that said G. McFarlane acknowledged said instrument to be the free act and deed
of said corporation.
Given under my hand this 24th day of July, 1995.
ANNABELLE DELUCA
Notary Public, State of
New York
No. 01 DE 5013759
Qualified in Kings County
Certificate filed in New
York County
Commission Expires
July 15, 1997
Exhibit 4(c)4
GEORGIA POWER COMPANY
to
CHEMICAL BANK
(Successor by Merger to Chemical Bank New York Trust
Company and The New York Trust Company),
Trustee
SUPPLEMENTAL INDENTURE
Dated as of September 1, 1995
Providing among other things for
FIRST MORTGAGE BONDS
5% Pollution Control Series due September 1, 2005
<PAGE>
SUPPLEMENTAL INDENTURE, dated as of September 1, 1995, made and entered
into by and between GEORGIA POWER COMPANY, a corporation organized and existing
under the laws of the State of Georgia with its principal office in Atlanta,
Fulton County, Georgia (hereinafter commonly referred to as the "Company"), and
CHEMICAL BANK (successor by merger to Chemical Bank New York Trust Company and
The New York Trust Company), a corporation organized and existing under the laws
of the State of New York, with its principal corporate trust office in the
Borough of Manhattan, The City of New York (hereinafter commonly referred to as
the "Trustee"), as Trustee under the Indenture dated as of March 1, 1941
originally entered into between the Company and The New York Trust Company, as
Trustee (hereinafter sometimes referred to as the "Original Indenture" and said
The New York Trust Company being hereinafter sometimes referred to as the
"Original Trustee"), securing bonds issued and to be issued as provided therein,
which Original Indenture has heretofore been supplemented and amended by various
supplemental indentures (which Original Indenture as so supplemented and amended
is hereinafter sometimes referred to as the "Indenture").
WHEREAS the Company and the Original Trustee have executed and
delivered the Original Indenture for the purpose of securing an issue of bonds
of the 3-1/2% Series due 1971 described therein and such additional bonds as may
from time to time be issued under and in accordance with the terms of the
Indenture, the aggregate principal amount of bonds to be secured thereby being
presently limited to $5,000,000,000 at any one time outstanding (except as
provided in Section 2.01 of the Indenture), and the Original Indenture is of
record in the public office of each county in the States of Georgia, Alabama,
Tennessee and South Carolina, and in the public office of the District of
Columbia, in which this Supplemental Indenture is to be recorded, and the
Original Indenture is on file at the principal corporate trust office of the
Trustee; and
WHEREAS the Company and the Trustee have executed and delivered various
supplemental indentures for the purpose, among others, of further securing said
bonds and of creating the bonds of other series described therein, which
supplemental indentures described and set forth additional property conveyed
thereby and are also of record in the public offices of some or all of the
counties in the States of Georgia, Alabama, Tennessee and South Carolina in
which this Supplemental Indenture is to be recorded, and one of which
supplemental indentures is also of record in the public office of the District
of Columbia, and said supplemental indentures are also on file at the principal
corporate trust office of the Trustee; and
WHEREAS the Company and the Trustee have executed and delivered the
Supplemental Indenture dated as of May 15, 1991, by which the third paragraph of
Section 1.02 of the Indenture was amended to read as follows:
<PAGE>
"The term 'Board of Directors' shall mean the Board of
Directors of the Company or any committee of the Board of Directors of
the Company authorized, with respect to any particular matter, to
exercise the power of the Board of Directors of the Company."; and
WHEREAS the Indenture provides for the issuance of bonds thereunder in
one or more series and the Company, by appropriate corporate action in
conformity with the terms of the Indenture, has duly determined to create a
series of bonds under the Indenture to be designated as "5% Pollution Control
Series due September 1, 2005" (hereinafter sometimes referred to as the "new
Bonds"), each of which bonds shall also bear the descriptive title "First
Mortgage Bond", the bonds of such series to bear interest at the annual rate and
to mature on the date designated in the title thereof; and
WHEREAS by a Plan of Merger dated June 11, 1959, effective September 8,
1959, between The New York Trust Company and Chemical Corn Exchange Bank, said
The New York Trust Company was merged into said Chemical Corn Exchange Bank
which continued under the name and style of Chemical Bank New York Trust
Company; and by a Plan of Merger dated November 26, 1968, effective February 17,
1969, among Chemical New York Corporation, Chemical Bank New York Trust Company
and Chemical Bank, said Chemical Bank New York Trust Company was merged into
said Chemical Bank which continued under the name and style of Chemical Bank;
and by virtue of said mergers Chemical Bank has become successor to The New York
Trust Company and Chemical Bank New York Trust Company, as Trustee under the
Indenture, and has become vested with all of the title to the mortgaged property
and trust estate; and with the trusts, powers, discretions, immunities,
privileges and all other matters as were vested in said The New York Trust
Company and said Chemical Bank New York Trust Company under the Indenture, with
like effect as if originally named as Trustee therein; and
WHEREAS each of the new Bonds is to be substantially in the following
form, with appropriate insertions and deletions, to wit:
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<PAGE>
[FORM OF NEW BOND]
GEORGIA POWER COMPANY
FIRST MORTGAGE BOND, 5% POLLUTION CONTROL SERIES
DUE SEPTEMBER 1, 2005
No. $
Georgia Power Company, a Georgia corporation (hereinafter called the
"Company"), for value received, hereby promises to pay to Trust Company Bank,
Atlanta, Georgia (as trustee under a Trust Indenture dated as of September 1,
1995 of the Development Authority of Appling County, relating to the Revenue
Bonds (hereinafter mentioned)), or registered assigns, the principal sum of
_____________________ Dollars on September 1, 2005, and to pay to the registered
owner hereof interest on said sum from the latest semi-annual interest payment
date to which interest has been paid on the bonds of this series preceding the
date hereof, unless the date hereof be an interest payment date to which
interest is being paid, in which case from the date hereof, or unless the date
hereof is prior to March 1, 1996, in which case from September 1, 1995, at the
rate per annum, until the principal hereof shall have become due and payable,
specified in the title of this bond, payable on March 1 and September 1 in each
year.
The obligation of the Company to make payments with respect to the
principal of and premium, if any, and interest on bonds of this series shall be
fully or partially, as the case may be, satisfied and discharged to the extent
that, at any time that any such payment shall be due, the Company shall have
made payments as required by the Company's Note dated September 28, 1995 issued
pursuant to Section 3.2 of the Loan Agreement dated as of September 1, 1995
between the Development Authority of Appling County and the Company, relating to
the Revenue Bonds (hereinafter mentioned), sufficient to pay fully or partially
the then due principal of and premium, if any, and interest on the Development
Authority of Appling County (Georgia) Pollution Control Revenue Bonds (Georgia
Power Company Plant Hatch Project), First Series 1995 (hereinafter referred to
as "Revenue Bonds") or there shall be in the Bond Fund established pursuant to
the Trust Indenture dated as of September 1, 1995 of the Development Authority
of Appling County to Trust Company Bank, Atlanta, Georgia, as trustee, relating
to the Revenue Bonds (hereinafter referred to as the "Revenue Indenture"),
sufficient available funds to pay fully or partially the then due principal of
and premium, if any, and interest on the Revenue Bonds.
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<PAGE>
This bond is one of the bonds issued and to be issued from time to time
under and in accordance with and all secured by an indenture of mortgage or deed
of trust dated as of March 1, 1941 given by the Company to The New York Trust
Company, to which Chemical Bank is successor by merger (hereinafter sometimes
referred to as the "Trustee"), as Trustee, and indentures supplemental thereto,
to which indenture and indentures supplemental thereto (hereinafter referred to
collectively as the "Indenture") reference is hereby made for a description of
the property mortgaged and pledged, the nature and extent of the security and
the rights, duties and immunities thereunder of the Trustee and the rights of
the holders of said bonds and of the Trustee and of the Company in respect of
such security. By the terms of the Indenture the bonds to be secured thereby are
issuable in series which may vary as to date, amount, date of maturity, rate of
interest and in other respects as in the Indenture provided.
Upon notice given by mailing the same, by first class mail postage
prepaid, not less than thirty nor more than forty-five days prior to the date
fixed for redemption to each registered holder of a bond to be redeemed (in
whole or in part) at the last address of such holder appearing on the registry
books, any or all of the bonds of this series may be redeemed by the Company at
any time and from time to time by the payment of the principal amount thereof
and accrued interest thereon to the date fixed for redemption, if redeemed by
the operation of the improvement fund or the replacement fund provisions of the
Indenture or by the use of proceeds of released property, as more fully set
forth in the Indenture.
In the manner provided in the Indenture, the bonds of this series shall
also be redeemable in whole, by payment of the principal amount thereof plus
accrued interest thereon to the date fixed for redemption, upon receipt by the
Trustee of a written demand from the trustee under the Revenue Indenture stating
that the principal amount of all the Revenue Bonds then outstanding under the
Revenue Indenture has been declared immediately due and payable pursuant to the
provisions of Section 8.02 of the Revenue Indenture. As provided in the
Indenture, the date fixed for such redemption may be not more than 180 days
after receipt by the Trustee of the aforesaid written demand and shall be
specified in a notice of redemption given not more than 10 nor less than 5 days
prior to the date so fixed for such redemption. As in the Indenture provided,
such notice of redemption shall be rescinded and become null and void for all
purposes under the Indenture upon rescission of the aforesaid written demand or
the aforesaid declaration of maturity under the Revenue Indenture, and thereupon
no redemption of the bonds of this series and no payments in respect thereof as
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<PAGE>
specified in such notice of redemption shall be effected or
required.
In the manner provided in the Indenture, the bonds of this series are
also redeemable in whole or in part upon receipt by the Trustee of a written
demand from the trustee under the Revenue Indenture specifying a principal
amount of Revenue Bonds which have been called for redemption pursuant to the
third paragraph of Section 3.01 of the Revenue Indenture. As provided in the
Indenture, bonds of this series equal in principal amount to the principal
amount of such Revenue Bonds to be redeemed will be redeemed on the date fixed
for redemption of the Revenue Bonds at the principal amount of such bonds of
this series and accrued interest thereon to the date fixed for redemption,
together with a premium equal to a percentage of the principal amount thereof
determined as set forth in the following tabulation:
If Redeemed During the Twelve Months'
Period Ending the Last Day of August
Regular
Redemption
Year Premium
2001 2%
2002 1%
and without premium if redeemed on or after September 1, 2002.
In case of certain defaults as specified in the Indenture, the
principal of this bond may be declared or may become due and payable on the
conditions, at the time, in the manner and with the effect provided in the
Indenture.
No recourse shall be had for the payment of the principal of or
premium, if any, or interest on this bond, or for any claim based hereon, or
otherwise in respect hereof or of the Indenture, to or against any incorporator,
stockholder, director or officer, past, present or future, as such, of the
Company, or of any predecessor or successor company, either directly or through
the Company, or such predecessor or successor company, under any constitution or
statute or rule of law, or by the enforcement of any assessment or penalty, or
otherwise, all such liability of incorporators, stockholders, directors and
officers being waived and released by the holder and owner hereof by the
acceptance of this bond and being likewise waived and released by the terms of
the Indenture.
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<PAGE>
This bond is transferable by the registered owner hereof, in person or
by attorney duly authorized, at the principal corporate trust office of the
Trustee, in the Borough of Manhattan, The City of New York, but only in the
manner prescribed in the Indenture, upon the surrender and cancellation of this
bond, and upon any such transfer a new registered bond or bonds, without
coupons, of the same series and maturity date and for the same aggregate
principal amount, in authorized denominations, will be issued to the transferee
in exchange herefor. The Company and the Trustee may deem and treat the person
in whose name this bond is registered as the absolute owner for the purpose of
receiving payment of or on account of the principal, premium, if any, and
interest due hereon and for all other purposes. Registered bonds of this series
shall be exchangeable for registered bonds of other authorized denominations
having the same aggregate principal amount, in the manner and upon the
conditions prescribed in the Indenture. However, notwithstanding the provisions
of the Indenture, no charge shall be made upon any transfer or exchange of bonds
of this series other than for any tax or taxes or other governmental charge
required to be paid by the Company.
This bond shall not be valid or become obligatory for any purpose
unless and until it shall have been authenticated by the execution by the
Trustee or its successor in trust under the Indenture of the certificate hereon.
IN WITNESS WHEREOF, Georgia Power Company has caused this bond to be
executed in its name by its President or one of its Vice Presidents by his
signature or a facsimile thereof, and its corporate seal or a facsimile thereof
to be hereto affixed and attested by its Secretary or one of its Assistant
Secretaries by his signature or a facsimile thereof.
Dated,
GEORGIA POWER COMPANY
By:
Attest:
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<PAGE>
TRUSTEE'S CERTIFICATE
This bond is one of the bonds, of the series designated therein,
described in the within-mentioned Indenture.
CHEMICAL BANK, as Trustee
By:
Authorized Officer
AND WHEREAS all acts and things necessary to make the new Bonds, when
authenticated by the Trustee and issued as in the Indenture and this
Supplemental Indenture provided, the valid, binding and legal obligations of the
Company, and to constitute the Indenture and this Supplemental Indenture valid,
binding and legal instruments for the security thereof, have been done and
performed, and the creation, execution and delivery of the Indenture and this
Supplemental Indenture and the creation, execution and issue of bonds subject to
the terms hereof and of the Indenture, have in all respects been duly
authorized;
NOW, THEREFORE, in consideration of the premises, and of the acceptance
and purchase by the holders thereof of the bonds issued and to be issued under
the Indenture and of the sum of One Dollar duly paid by the Trustee to the
Company, and of other good and valuable considerations, the receipt whereof is
hereby acknowledged, and for the purpose of further securing the due and
punctual payment of the principal of and premium, if any, and interest on the
bonds issued and now outstanding under the Indenture, and the $57,000,000
principal amount of new Bonds proposed to be issued and all other bonds which
shall be issued under the Indenture, or the Indenture as supplemented and
amended, and for the purpose of further securing the faithful performance and
observance of all covenants and conditions therein and in any indenture
supplemental thereto set forth, the Company has given, granted, bargained, sold,
transferred, assigned, hypothecated, pledged, mortgaged, warranted, aliened and
conveyed and by these presents does give, grant, bargain, sell, transfer,
assign, hypothecate, pledge, mortgage, warrant, alien and convey unto Chemical
Bank, as Trustee, as provided in the Indenture, and its successor or successors
in the trust thereby and hereby created, and to its or their assigns forever,
all the right, title and interest of the Company in and to all premises,
property, franchises and rights of every kind and description, real, personal
and mixed, tangible and intangible, now owned or hereafter acquired by the
Company (excepting,
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<PAGE>
however, that which is by the Indenture expressly reserved from the lien and
effect thereof), including but not limited to the property described in Exhibit
"A" attached hereto and by this reference made a part hereof; unless otherwise
noted, such property is located in the State of Georgia and unless otherwise
noted, references herein to a county or counties shall mean such county or
counties in the State of Georgia.
TOGETHER WITH all and singular the tenements, hereditaments and
appurtenances belonging or in anywise appertaining to the property, rights and
franchises or any thereof, referred to in the foregoing granting clauses, with
the reversion and reversions, remainder and remainders and (subject to the
provisions of Article X of the Indenture) the tolls, rents, revenues, issues,
earnings, income, products and profits thereof, and all the estate, right, title
and interest and claim whatsoever, at law as well as in equity, which the
Company now has or may hereafter acquire in and to the aforesaid property,
rights and franchises and every part and parcel thereof.
TO HAVE AND TO HOLD all said property, rights and franchises hereby
conveyed, assigned, pledged or mortgaged, or intended so to be, unto the
Trustee, its successor or successors in trust, and their assigns forever;
BUT IN TRUST, NEVERTHELESS, with power of sale, for the equal and
proportionate benefit and security of the holders of all bonds and interest
coupons now or hereafter issued under the Indenture, as supplemented and
amended, pursuant to the provisions thereof, and for the enforcement of the
payment of said bonds and coupons when payable and for the performance of and
compliance with the covenants and conditions of the Indenture, as supplemented
and amended, without any preference, distinction or priority as to lien or
otherwise of any bond or bonds over others by reason of the difference in time
of the actual issue, sale or negotiation thereof or for any other reason
whatsoever, except as otherwise expressly provided in the Indenture, as
supplemented and amended; and so that each and every bond now or hereafter
issued thereunder shall have the same lien; and so that the principal of and
premium, if any, and interest on every such bond shall, subject to the terms
thereof, be equally and proportionately secured thereby and hereby, as if it had
been made, executed, delivered, sold and negotiated simultaneously with the
execution and delivery of the Original Indenture.
AND IT IS EXPRESSLY DECLARED that all bonds issued and secured under
the Indenture and hereunder are to be issued, authenticated and delivered, and
all said property, rights and
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<PAGE>
franchises hereby and by the Indenture conveyed, assigned, pledged or mortgaged,
or intended so to be (including all the right, title and interest of the Company
in and to any and all premises, property, franchises and rights of every kind
and description, real, personal and mixed, tangible and intangible, thereafter
acquired by the Company and whether or not specifically described in the
Original Indenture or in any indenture supplemental thereto, except any therein
expressly excepted), are to be dealt with and disposed of, under, upon and
subject to the terms, conditions, stipulations, covenants, agreements, trusts
and uses and purposes expressed in the Indenture and herein, and it is hereby
agreed as follows:
SECTION 1. There is hereby created a series of bonds designated as
hereinabove in the fourth Whereas clause set forth, each of which shall contain
suitable provisions with respect to the matters hereinafter in this Section
specified, and the form thereof shall be substantially as hereinbefore set
forth. New Bonds shall mature on the date specified in the title thereof, and
the definitive bonds of such series may be issued only as registered bonds
without coupons. New Bonds shall be in such denominations as the Board of
Directors shall approve, and execution and delivery to the Trustee for
authentication shall be conclusive evidence of such approval. The serial numbers
of new Bonds shall be such as may be approved by any officer of the Company, the
execution thereof by any such officer to be conclusive evidence of such
approval.
New Bonds, until the principal thereof shall have become due and
payable, shall bear interest at the annual rate designated in the title thereof,
payable semi-annually on March 1 and September 1 in each year, commencing March
1, 1996. New Bonds shall be dated the date of authentication.
The principal of and premium, if any, and interest on the new Bonds
shall be payable in any coin or currency of the United States of America which
at the time of payment is legal tender for public and private debts, at the
office or agency of the Company in the Borough of Manhattan, The City of New
York, designated for that purpose.
New Bonds may be transferred at the principal corporate trust office of
the Trustee, in the Borough of Manhattan, The City of New York. New Bonds shall
be exchangeable for other bonds of the same series, in the manner and upon the
conditions prescribed in the Indenture, upon the surrender of such new Bonds at
said principal corporate trust office of the Trustee. However, notwithstanding
the provisions of Section 2.05 of the Indenture, no charge shall be made upon
any transfer or exchange
-9-
<PAGE>
of new Bonds other than for any tax or taxes or other governmental charge
required to be paid by the Company.
Any or all of the new Bonds shall be redeemable at any time and from
time to time, prior to maturity, upon notice given by mailing the same, by first
class mail postage prepaid, not less than thirty nor more than forty-five days
prior to the date fixed for redemption to each registered holder of a bond to be
redeemed (in whole or in part) at the last address of such holder appearing on
the registry books, at the principal amount thereof and accrued interest
thereon, if any, to the date fixed for redemption, if redeemed by the operation
of Section 4 of the Supplemental Indenture dated as of November 1, 1962 or of
the improvement fund provisions of any supplemental indenture or by the use of
proceeds of released property.
SECTION 2. The obligation of the Company to make payments with respect
to the principal of and premium, if any, and interest on the new Bonds shall be
fully or partially, as the case may be, satisfied and discharged, to the extent
that, at the time that any such payment shall be due, the Company shall have
made payments as required by the Company's Note dated September 28, 1995 issued
pursuant to Section 3.2 of the Loan Agreement dated as of September 1, 1995
between the Development Authority of Appling County and the Company, relating to
the Appling Bonds (hereinafter defined), sufficient to pay fully or partially
the then due principal of and premium, if any, and interest on the Development
Authority of Appling County (Georgia) Pollution Control Revenue Bonds (Georgia
Power Company Plant Hatch Project), First Series 1995 (hereinafter referred to
as the "Appling Bonds") or there shall be in the related Bond Fund established
pursuant to the Trust Indenture dated as of September 1, 1995 of the Development
Authority of Appling County to Trust Company Bank, Atlanta, Georgia, as trustee,
relating to the Appling Bonds (hereinafter referred to as the "Appling
Indenture"), sufficient available funds to pay fully or partially the then due
principal of and premium, if any, and interest on the Appling Bonds. The Trustee
may conclusively presume that the obligation of the Company to make payments
with respect to the principal of and premium, if any, and interest on the new
Bonds shall have been fully satisfied and discharged unless and until the
Trustee shall have received a written notice from the trustee under the Appling
Indenture stating (i) that timely payment of principal of or premium, if any, or
interest on the Appling Bonds has not been made, (ii) that there are not
sufficient available funds in such Bond Fund to make such payment and (iii) the
amount of funds required to make such payment.
In addition to the redemption as provided in Section 1 hereof, the new
Bonds shall also be redeemable in whole upon receipt by the Trustee of a written
demand for the redemption of the new Bonds (hereinafter called "Redemption
Demand") from the
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<PAGE>
trustee under the Appling Indenture stating that the principal amount of all the
Appling Bonds then outstanding under the Appling Indenture has been declared
immediately due and payable pursuant to the provisions of Section 8.02 of the
Appling Indenture, specifying the date from which unpaid interest on the Appling
Bonds has then accrued and stating that such declaration of maturity has not
been rescinded. The Trustee shall within 10 days of receiving the Redemption
Demand mail a copy thereof to the Company stamped or otherwise marked to
indicate the date of receipt by the Trustee. The Company shall fix a redemption
date for the redemption so demanded (herein called the "Demand Redemption") and
shall mail to the Trustee notice of such date at least 30 days prior thereto.
The date fixed for Demand Redemption may be any day not more than 180 days after
receipt by the Trustee of the Redemption Demand. If the Trustee does not receive
such notice from the Company within 150 days after receipt by the Trustee of the
Redemption Demand, the date for Demand Redemption shall be deemed fixed at the
180th day after such receipt. The Trustee shall mail notice of the date fixed
for Demand Redemption (hereinafter called the "Demand Redemption Notice") to the
trustee under the Appling Indenture (and the registered holders of the new Bonds
if other than said trustee) not more than 10 nor less than 5 days prior to the
date fixed for Demand Redemption, provided, however, that the Trustee shall mail
no Demand Redemption Notice (and no Demand Redemption shall be made) if prior to
the mailing of the Demand Redemption Notice the Trustee shall have received
written notice of rescission of the Redemption Demand from the trustee under the
Appling Indenture. Demand Redemption of the new Bonds shall be at the principal
amount thereof, plus accrued interest thereon to the date fixed for redemption,
and such amount shall become and be due and payable on the date fixed for Demand
Redemption as above provided. Anything in this paragraph contained to the
contrary notwithstanding, if, after mailing of the Demand Redemption Notice and
prior to the date fixed for Demand Redemption, the Trustee shall have been
advised in writing by the trustee under the Appling Indenture that the
Redemption Demand has been rescinded, the Demand Redemption Notice shall
thereupon, without further act of the Trustee or the Company, be rescinded and
become null and void for all purposes hereunder and no redemption of the new
Bonds and no payments in respect thereof as specified in the Demand Redemption
Notice shall be effected or required.
The new Bonds shall also be redeemable in whole at any time, or in part
from time to time (hereinafter called the "Regular Redemption"), upon receipt by
the Trustee of a written demand (hereinafter referred to as the "Regular
Redemption Demand") from the trustee under the Appling Indenture stating: (1)
the principal amount of Appling Bonds to be redeemed pursuant to the third
paragraph of Section 3.01 of the Appling Indenture; (2) the date of such
redemption and that notice thereof has been given as required by the Appling
Indenture; (3) that the Trustee shall
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<PAGE>
call for redemption on the stated date fixed for redemption of the Appling Bonds
a principal amount of the new Bonds equal to the principal amount of Appling
Bonds to be redeemed; and (4) that the trustee under the Appling Indenture, as
holder of all the new Bonds then outstanding, waives notice of such redemption.
The Trustee may conclusively presume the statements contained in the Regular
Redemption Demand to be correct. Regular Redemption of the new Bonds shall be at
the principal amount thereof and accrued interest thereon to the date fixed for
redemption, together with a premium equal to a percentage of the principal
amount thereof determined as set forth in the tabulation appearing in the form
of the bond hereinbefore set forth, and such amount shall become and be due and
payable, subject to the first paragraph of this Section 2, on the date fixed for
such Regular Redemption, which shall be the date specified pursuant to item (2)
of the Regular Redemption Demand as above provided.
SECTION 3. The Company covenants that the provisions of Section 4 of
the Supplemental Indenture dated as of November 1, 1962, shall be in full force
and effect so long as any new Bonds shall be outstanding under the Indenture.
SECTION 4. As supplemented by this Supplemental Indenture, the
Indenture is in all respects ratified and confirmed, and the Indenture and this
Supplemental Indenture shall be read, taken and construed as one and the same
instrument.
SECTION 5. Nothing in this Supplemental Indenture contained shall, or
shall be construed to, confer upon any person other than a holder of bonds
issued under the Indenture, as supplemented and amended, the Company and the
Trustee any right or interest to avail himself of any benefit under any
provision of the Indenture or of this Supplemental Indenture.
SECTION 6. The Trustee assumes no responsibility for or in respect of
the validity or sufficiency of this Supplemental Indenture or the due execution
hereof by the Company or for or in respect of the recitals and statements
contained herein, all of which recitals and statements are made solely by the
Company.
SECTION 7. This Supplemental Indenture may be executed in several
counterparts and all such counterparts executed and delivered, each as an
original, shall constitute but one and the same instrument.
SECTION 8. Although this Supplemental Indenture, for convenience and
for the purposes of reference, is dated as of the day and year first above
written, the actual dates of execution by the Company and the Trustee are as
indicated by their respective acknowledgments hereto annexed.
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<PAGE>
IN WITNESS WHEREOF, said Georgia Power Company has caused this
Supplemental Indenture to be executed in its corporate name by its President or
one of its Vice Presidents and its corporate seal to be hereunto affixed and to
be attested by its Secretary or one of its Assistant Secretaries, and said
Chemical Bank, to evidence its acceptance hereof, has caused this Supplemental
Indenture to be executed in its corporate name by one of its Vice Presidents,
Senior Trust Officers or Trust Officers and its corporate seal to be hereunto
affixed and to be attested by one of its Senior Trust Officers, Trust Officers,
Assistant Trust Officers or Assistant Secretaries, in several counterparts, all
as of the day and year first above written.
GEORGIA POWER COMPANY
By:
Vice President
Attest:
Assistant Corporate Secretary
Signed, sealed and delivered this 21st day of September, 1995 by Georgia Power
Company in the County of Fulton, State of Georgia, in the presence of
Unofficial Witness
Notary Public, Henry County, Georgia
My Commission Expires April 20, 1999
(signatures continued on next page)
<PAGE>
CHEMICAL BANK
By:
Vice President
Attest:
Senior Trust Officer
Signed, sealed and delivered this 22nd day of September, 1995 by Chemical Bank
in the County of New York, State of New York, in the presence of
Unofficial Witness
ANNABELLE DELUCA
Notary Public, State of New York
No. 01 DE 5013759
Qualified in Kings County
Certificate filed in New York County
Commission Expires July 15, 1997
<PAGE>
STATE OF GEORGIA )
) SS.:
COUNTY OF FULTON )
On the 21st day of September, 1995, personally appeared before me
Angela K. Page, a Notary Public in and for the State and County aforesaid, Linda
J. Hein, who made oath and said that she was present and saw the corporate seal
of Georgia Power Company affixed to the above written instrument, that she saw
Judy M. Anderson, Vice President, with Cherry C. Hudgins, Assistant Corporate
Secretary, known to her to be such officers of said corporation respectively,
attest the same, and that she, deponent, with Angela K. Page witnessed the
execution and delivery of the said instrument as the free act and deed of said
Georgia Power Company.
Subscribed and sworn to )
before me this 21st day of )
September, 1995 )
Notary Public, Henry County, Georgia
My Commission Expires April 20, 1999
<PAGE>
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
On the 22nd day of September, 1995, personally appeared before me
Annabelle DeLuca, a Notary Public in and for the State and County aforesaid, B.
Kelly, who made oath and said that she was present and saw the corporate seal of
Chemical Bank affixed to the above written instrument, that she saw G.
McFarlane, Vice President, with R. Lorenzen, Senior Trust Officer, known to her
to be such officers of said corporation respectively, attest the same, and that
she, deponent, with Annabelle DeLuca, witnessed the execution and delivery of
the said instrument as the free act and deed of said Chemical Bank.
Subscribed and sworn to )
before me this 22nd day of )
September, 1995 )
ANNABELLE DELUCA
Notary Public, State of New York
No. 01 DE 5013759
Qualified in Kings County
Certificate filed in New York County
Commission Expires July 15, 1997
<PAGE>
STATE OF GEORGIA )
) SS.:
COUNTY OF FULTON )
On the 21st day of September, in the year one thousand nine hundred and
ninety-five, before me personally came Judy M. Anderson, to me known, who, being
by me duly sworn, did depose and say that she resides at 199 14th Street, N.E.,
Atlanta, Georgia; that she is a Vice President of Georgia Power Company, one of
the corporations described in and which executed the foregoing instrument; that
she knows the seal of said corporation; that the seal affixed to said instrument
is such corporate seal; that it was so affixed by order of the Board of
Directors of said corporation; and that she signed her name thereto by like
order.
Notary Public, Henry
County, Georgia
My Commission Expires
April 20, 1999
<PAGE>
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
On the 22nd day of September, in the year one thousand nine hundred and
ninety-five, before me personally came G. McFarlane, to me known, who, being by
me duly sworn, did depose and say that he resides at 1678 N. Gardiner Drive, Bay
Shore, New York; that he is a Vice President of Chemical Bank, one of the
corporations described in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by order of the Board of Directors
of said corporation; and that he signed his name thereto by like order.
ANNABELLE DELUCA
Notary Public, State of
New York
No. 01 DE 5013759
Qualified in Kings County
Certificate filed in New
York County
Commission Expires
July 15, 1997
<PAGE>
STATE OF GEORGIA )
) SS.:
COUNTY OF FULTON )
On the 21st day of September, 1995, before me appeared Judy M.
Anderson, to me personally known, who, being by me duly sworn, did say that she
is a Vice President of Georgia Power Company, and that the seal affixed to said
instrument is the corporate seal of said corporation and that said instrument
was signed and sealed in behalf of said corporation by authority of its Board of
Directors, and that said Judy M. Anderson acknowledged said instrument to be the
free act and deed of said corporation.
Given under my hand this 21st day of September, 1995.
Notary Public, Henry
County, Georgia
My Commission Expires
April 20, 1999
<PAGE>
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
On the 22nd day of September, 1995, before me appeared G. McFarlane, to
me personally known, who, being by me duly sworn, did say that he is a Vice
President of Chemical Bank, and that the seal affixed to said instrument is the
corporate seal of said corporation and that said instrument was signed and
sealed in behalf of said corporation by authority of its Board of Directors, and
that said G. McFarlane acknowledged said instrument to be the free act and deed
of said corporation.
Given under my hand this 22nd day of September, 1995.
ANNABELLE DELUCA
Notary Public, State of
New York
No. 01 DE 5013759
Qualified in Kings County
Certificate filed in New
York County
Commission Expires
July 15, 1997
Exhibit 4(c)5
GEORGIA POWER COMPANY
to
CHEMICAL BANK
(Successor by Merger to Chemical Bank New York Trust
Company and The New York Trust Company),
Trustee
SECOND SUPPLEMENTAL INDENTURE
Dated as of September 1, 1995
Providing among other things for
FIRST MORTGAGE BONDS
First Pollution Control Series due September 1, 2025
Second Pollution Control Series due September 1, 2025
Third Pollution Control Series due September 1, 2025
<PAGE>
SECOND SUPPLEMENTAL INDENTURE, dated as of September 1, 1995, made and
entered into by and between GEORGIA POWER COMPANY, a corporation organized and
existing under the laws of the State of Georgia with its principal office in
Atlanta, Fulton County, Georgia (hereinafter commonly referred to as the
"Company"), and CHEMICAL BANK (successor by merger to Chemical Bank New York
Trust Company and The New York Trust Company), a corporation organized and
existing under the laws of the State of New York, with its principal corporate
trust office in the Borough of Manhattan, The City of New York (hereinafter
commonly referred to as the "Trustee"), as Trustee under the Indenture dated as
of March 1, 1941 originally entered into between the Company and The New York
Trust Company, as Trustee (hereinafter sometimes referred to as the "Original
Indenture" and said The New York Trust Company being hereinafter sometimes
referred to as the "Original Trustee"), securing bonds issued and to be issued
as provided therein, which Original Indenture has heretofore been supplemented
and amended by various supplemental indentures (which Original Indenture as so
supplemented and amended is hereinafter sometimes referred to as the
"Indenture").
WHEREAS the Company and the Original Trustee have executed and
delivered the Original Indenture for the purpose of securing an issue of bonds
of the 3-1/2% Series due 1971 described therein and such additional bonds as may
from time to time be issued under and in accordance with the terms of the
Indenture, the aggregate principal amount of bonds to be secured thereby being
presently limited to $5,000,000,000 at any one time outstanding (except as
provided in Section 2.01 of the Indenture), and the Original Indenture is of
record in the public office of each county in the States of Georgia, Alabama,
Tennessee and South Carolina, and in the public office of the District of
Columbia, in which this Supplemental Indenture is to be recorded, and the
Original Indenture is on file at the principal corporate trust office of the
Trustee; and
WHEREAS the Company and the Trustee have executed and delivered various
supplemental indentures for the purpose, among others, of further securing said
bonds and of creating the bonds of other series described therein, which
supplemental indentures described and set forth additional property conveyed
thereby and are also of record in the public offices of some or all of the
counties in the States of Georgia, Alabama, Tennessee and South Carolina in
which this Supplemental Indenture is to be recorded, and one of which
supplemental indentures is also of record in the public office of the District
of Columbia, and said supplemental indentures are also on file at the principal
corporate trust office of the Trustee; and
WHEREAS the Company and the Trustee have executed and delivered the
Supplemental Indenture dated as of May 15, 1991, by which the third paragraph of
Section 1.02 of the Indenture was amended to read as follows:
<PAGE>
"The term 'Board of Directors' shall mean the Board of
Directors of the Company or any committee of the Board of Directors of
the Company authorized, with respect to any particular matter, to
exercise the power of the Board of Directors of the Company."; and
WHEREAS the Indenture provides for the issuance of bonds thereunder in
one or more series and the Company, by appropriate corporate action in
conformity with the terms of the Indenture, has duly determined to create three
series of bonds under the Indenture to be designated, respectively, as "First
Pollution Control Series due September 1, 2025" (hereinafter sometimes referred
to as the "new First Series Bonds"), "Second Pollution Control Series due
September 1, 2025" (hereinafter sometimes referred to as the "new Second Series
Bonds") and "Third Pollution Control Series due September 1, 2025" (hereinafter
sometimes referred to as the "new Third Series Bonds") (the new First Series
Bonds, the new Second Series Bonds and the new Third Series Bonds being
hereinafter sometimes referred to collectively as the "new Bonds"), each of
which bonds shall also bear the descriptive title "First Mortgage Bond", the
bonds of each such series to bear interest as herein provided and to mature on
the date designated in the title thereof; and
WHEREAS by a Plan of Merger dated June 11, 1959, effective September 8,
1959, between The New York Trust Company and Chemical Corn Exchange Bank, said
The New York Trust Company was merged into said Chemical Corn Exchange Bank
which continued under the name and style of Chemical Bank New York Trust
Company; and by a Plan of Merger dated November 26, 1968, effective February 17,
1969, among Chemical New York Corporation, Chemical Bank New York Trust Company
and Chemical Bank, said Chemical Bank New York Trust Company was merged into
said Chemical Bank which continued under the name and style of Chemical Bank;
and by virtue of said mergers Chemical Bank has become successor to The New York
Trust Company and Chemical Bank New York Trust Company, as Trustee under the
Indenture, and has become vested with all of the title to the mortgaged property
and trust estate; and with the trusts, powers, discretions, immunities,
privileges and all other matters as were vested in said The New York Trust
Company and said Chemical Bank New York Trust Company under the Indenture, with
like effect as if originally named as Trustee therein; and
WHEREAS each of the new Bonds of each series is to be substantially in
the following form, with appropriate insertions and deletions, to wit:
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<PAGE>
[FORM OF NEW BOND OF EACH SERIES]
GEORGIA POWER COMPANY
FIRST MORTGAGE BOND, _____ POLLUTION CONTROL SERIES
DUE SEPTEMBER 1, 2025
No. $
Georgia Power Company, a Georgia corporation (hereinafter called the
"Company"), for value received, hereby promises to pay to Bank South, Atlanta,
Georgia (as trustee under a Trust Indenture dated as of September 1, 1995 of the
Development Authority of Burke County, relating to the Revenue Bonds
(hereinafter mentioned)), or registered assigns, the principal sum of
_____________________ Dollars on September 1, 2025, and to pay to the registered
owner hereof interest on said sum from the latest interest payment date to which
interest has been paid on the bonds of this series preceding the date hereof,
unless the date hereof be an interest payment date to which interest is being
paid, in which case from the date hereof, or unless the date hereof is prior to
the first interest payment date, in which case from September 27, 1995, at the
same rates, until the principal hereof shall have become due and payable,
payable on the same dates, as the Revenue Bonds pursuant to the Revenue
Indenture (hereinafter mentioned).
The obligation of the Company to make payments with respect to the
principal of and premium, if any, and interest on bonds of this series shall be
fully or partially, as the case may be, satisfied and discharged to the extent
that, at any time that any such payment shall be due, the Company shall have
made payments as required by the Company's Note dated September 27, 1995 issued
pursuant to Section 3.2 of the Loan Agreement dated as of September 1, 1995
between the Development Authority of Burke County and the Company, relating to
the Revenue Bonds (hereinafter mentioned), sufficient to pay fully or partially
the then due principal of and premium, if any, and interest on the Development
Authority of Burke County (Georgia) Pollution Control Revenue Bonds (Georgia
Power Company Plant Vogtle Project), _____ Series 1995 (hereinafter referred to
as "Revenue Bonds") or there shall be on deposit with the trustee pursuant to
the Trust Indenture dated as of September 1, 1995 of the Development Authority
of Burke County to Bank South, Atlanta, Georgia, as trustee, relating to the
Revenue Bonds (hereinafter referred to as the "Revenue Indenture"), sufficient
available funds to pay
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<PAGE>
fully or partially the then due principal of and premium, if any,
and interest on the Revenue Bonds.
This bond is one of the bonds issued and to be issued from time to time
under and in accordance with and all secured by an indenture of mortgage or deed
of trust dated as of March 1, 1941 given by the Company to The New York Trust
Company, to which Chemical Bank is successor by merger (hereinafter sometimes
referred to as the "Trustee"), as Trustee, and indentures supplemental thereto,
to which indenture and indentures supplemental thereto (hereinafter referred to
collectively as the "Indenture") reference is hereby made for a description of
the property mortgaged and pledged, the nature and extent of the security and
the rights, duties and immunities thereunder of the Trustee and the rights of
the holders of said bonds and of the Trustee and of the Company in respect of
such security. By the terms of the Indenture the bonds to be secured thereby are
issuable in series which may vary as to date, amount, date of maturity, rate of
interest and in other respects as in the Indenture provided.
Upon notice given by mailing the same, by first class mail postage
prepaid, not less than thirty nor more than forty-five days prior to the date
fixed for redemption to each registered holder of a bond to be redeemed (in
whole or in part) at the last address of such holder appearing on the registry
books, any or all of the bonds of this series may be redeemed by the Company at
any time and from time to time by the payment of the principal amount thereof
and accrued interest thereon to the date fixed for redemption, if redeemed by
the operation of the improvement fund or the replacement fund provisions of the
Indenture or by the use of proceeds of released property, as more fully set
forth in the Indenture.
In the manner provided in the Indenture, the bonds of this series shall
also be redeemable in whole, by payment of the principal amount thereof plus
accrued interest thereon to the date fixed for redemption, upon receipt by the
Trustee of a written demand from the trustee under the Revenue Indenture stating
that the principal amount of all the Revenue Bonds then outstanding under the
Revenue Indenture has been declared immediately due and payable pursuant to the
provisions of Section 8.02 of the Revenue Indenture. As provided in the
Indenture, the date fixed for such redemption may be not more than 180 days
after receipt by the Trustee of the aforesaid written demand and shall be
specified in a notice of redemption given not more than 10 nor less than 5 days
prior to the date so fixed for such redemption. As in the Indenture provided,
such notice of redemption shall be rescinded and become null and void
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<PAGE>
for all purposes under the Indenture upon rescission of the aforesaid written
demand or the aforesaid declaration of maturity under the Revenue Indenture, and
thereupon no redemption of the bonds of this series and no payments in respect
thereof as specified in such notice of redemption shall be effected or required.
In the manner provided in the Indenture, the bonds of this series are
also redeemable in whole or in part upon receipt by the Trustee of a written
demand from the trustee under the Revenue Indenture specifying a principal
amount of Revenue Bonds which have been called for redemption pursuant to the
optional redemption provisions of the Revenue Bonds and the Revenue Indenture.
As provided in the Indenture, bonds of this series equal in principal amount to
the principal amount of such Revenue Bonds to be redeemed pursuant to such
optional redemption provisions will be redeemed on the date fixed for redemption
of the Revenue Bonds at the principal amount of such bonds of this series and
accrued interest thereon to the date fixed for redemption, together with a
premium equal to the redemption premium (if any) payable upon such redemption of
Revenue Bonds.
In case of certain defaults as specified in the Indenture, the
principal of this bond may be declared or may become due and payable on the
conditions, at the time, in the manner and with the effect provided in the
Indenture.
No recourse shall be had for the payment of the principal of or
premium, if any, or interest on this bond, or for any claim based hereon, or
otherwise in respect hereof or of the Indenture, to or against any incorporator,
stockholder, director or officer, past, present or future, as such, of the
Company, or of any predecessor or successor company, either directly or through
the Company, or such predecessor or successor company, under any constitution or
statute or rule of law, or by the enforcement of any assessment or penalty, or
otherwise, all such liability of incorporators, stockholders, directors and
officers being waived and released by the holder and owner hereof by the
acceptance of this bond and being likewise waived and released by the terms of
the Indenture.
This bond is transferable by the registered owner hereof, in person or
by attorney duly authorized, at the principal corporate trust office of the
Trustee, in the Borough of Manhattan, The City of New York, but only in the
manner prescribed in the Indenture, upon the surrender and cancellation of this
bond, and upon any such transfer a new registered bond or bonds, without
coupons, of the same series and maturity date and for the same aggregate
principal amount, in authorized denominations, will be
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<PAGE>
issued to the transferee in exchange herefor. The Company and the Trustee may
deem and treat the person in whose name this bond is registered as the absolute
owner for the purpose of receiving payment of or on account of the principal,
premium, if any, and interest due hereon and for all other purposes. Registered
bonds of this series shall be exchangeable for registered bonds of other
authorized denominations having the same aggregate principal amount, in the
manner and upon the conditions prescribed in the Indenture. However,
notwithstanding the provisions of the Indenture, no charge shall be made upon
any transfer or exchange of bonds of this series other than for any tax or taxes
or other governmental charge required to be paid by the Company.
This bond shall not be valid or become obligatory for any purpose
unless and until it shall have been authenticated by the execution by the
Trustee or its successor in trust under the Indenture of the certificate hereon.
IN WITNESS WHEREOF, Georgia Power Company has caused this bond to be
executed in its name by its President or one of its Vice Presidents by his
signature or a facsimile thereof, and its corporate seal or a facsimile thereof
to be hereto affixed and attested by its Secretary or one of its Assistant
Secretaries by his signature or a facsimile thereof.
Dated,
GEORGIA POWER COMPANY
By:
Attest:
TRUSTEE'S CERTIFICATE
This bond is one of the bonds, of the series designated therein,
described in the within-mentioned Indenture.
CHEMICAL BANK, as Trustee
By:
Authorized Officer
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<PAGE>
AND WHEREAS all acts and things necessary to make the new Bonds of each
series, when authenticated by the Trustee and issued as in the Indenture and
this Supplemental Indenture provided, the valid, binding and legal obligations
of the Company, and to constitute the Indenture and this Supplemental Indenture
valid, binding and legal instruments for the security thereof, have been done
and performed, and the creation, execution and delivery of the Indenture and
this Supplemental Indenture and the creation, execution and issue of bonds
subject to the terms hereof and of the Indenture, have in all respects been duly
authorized;
NOW, THEREFORE, in consideration of the premises, and of the acceptance
and purchase by the holders thereof of the bonds issued and to be issued under
the Indenture and of the sum of One Dollar duly paid by the Trustee to the
Company, and of other good and valuable considerations, the receipt whereof is
hereby acknowledged, and for the purpose of further securing the due and
punctual payment of the principal of and premium, if any, and interest on the
bonds issued and now outstanding under the Indenture, and the $35,585,000
principal amount of new First Series Bonds, $30,000,000 principal amount of new
Second Series Bonds and $27,000,000 principal amount of new Third Series Bonds
proposed to be issued and all other bonds which shall be issued under the
Indenture, or the Indenture as supplemented and amended, and for the purpose of
further securing the faithful performance and observance of all covenants and
conditions therein and in any indenture supplemental thereto set forth, the
Company has given, granted, bargained, sold, transferred, assigned,
hypothecated, pledged, mortgaged, warranted, aliened and conveyed and by these
presents does give, grant, bargain, sell, transfer, assign, hypothecate, pledge,
mortgage, warrant, alien and convey unto Chemical Bank, as Trustee, as provided
in the Indenture, and its successor or successors in the trust thereby and
hereby created, and to its or their assigns forever, all the right, title and
interest of the Company in and to all premises, property, franchises and rights
of every kind and description, real, personal and mixed, tangible and
intangible, now owned or hereafter acquired by the Company (excepting, however,
that which is by the Indenture expressly reserved from the lien and effect
thereof);
TOGETHER WITH all and singular the tenements, hereditaments and
appurtenances belonging or in anywise appertaining to the property, rights and
franchises or any thereof, referred to in the foregoing granting clauses, with
the reversion and reversions, remainder and remainders and (subject to the
provisions of Article X of the Indenture) the tolls, rents, revenues, issues,
earnings, income, products and profits thereof,
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<PAGE>
and all the estate, right, title and interest and claim whatsoever, at law as
well as in equity, which the Company now has or may hereafter acquire in and to
the aforesaid property, rights and franchises and every part and parcel thereof.
TO HAVE AND TO HOLD all said property, rights and franchises hereby
conveyed, assigned, pledged or mortgaged, or intended so to be, unto the
Trustee, its successor or successors in trust, and their assigns forever;
BUT IN TRUST, NEVERTHELESS, with power of sale, for the equal and
proportionate benefit and security of the holders of all bonds and interest
coupons now or hereafter issued under the Indenture, as supplemented and
amended, pursuant to the provisions thereof, and for the enforcement of the
payment of said bonds and coupons when payable and for the performance of and
compliance with the covenants and conditions of the Indenture, as supplemented
and amended, without any preference, distinction or priority as to lien or
otherwise of any bond or bonds over others by reason of the difference in time
of the actual issue, sale or negotiation thereof or for any other reason
whatsoever, except as otherwise expressly provided in the Indenture, as
supplemented and amended; and so that each and every bond now or hereafter
issued thereunder shall have the same lien; and so that the principal of and
premium, if any, and interest on every such bond shall, subject to the terms
thereof, be equally and proportionately secured thereby and hereby, as if it had
been made, executed, delivered, sold and negotiated simultaneously with the
execution and delivery of the Original Indenture.
AND IT IS EXPRESSLY DECLARED that all bonds issued and secured under
the Indenture and hereunder are to be issued, authenticated and delivered, and
all said property, rights and franchises hereby and by the Indenture conveyed,
assigned, pledged or mortgaged, or intended so to be (including all the right,
title and interest of the Company in and to any and all premises, property,
franchises and rights of every kind and description, real, personal and mixed,
tangible and intangible, thereafter acquired by the Company and whether or not
specifically described in the Original Indenture or in any indenture
supplemental thereto, except any therein expressly excepted), are to be dealt
with and disposed of, under, upon and subject to the terms, conditions,
stipulations, covenants, agreements, trusts and uses and purposes expressed in
the Indenture and herein, and it is hereby agreed as follows:
SECTION 1. There are hereby created three series of bonds
designated as hereinabove in the fourth Whereas clause set forth,
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<PAGE>
each of which shall contain suitable provisions with respect to the matters
hereinafter in this Section specified, and the form thereof shall be
substantially as hereinbefore set forth. New Bonds of each such series shall
mature on the date specified in the title thereof, and the definitive bonds of
each such series may be issued only as registered bonds without coupons. New
Bonds of each such series shall be in such denominations as the Board of
Directors shall approve, and execution and delivery to the Trustee for
authentication shall be conclusive evidence of such approval. The serial numbers
of new Bonds of each such series shall be such as may be approved by any officer
of the Company, the execution thereof by any such officer to be conclusive
evidence of such approval.
New Bonds, until the principal thereof shall have become due and
payable, shall bear interest at the same rates, payable on the same dates, as
(i) the Third Series Burke Bonds pursuant to the Third Series Burke Indenture
(each as hereinafter defined) in the case of the new First Series Bonds, (ii)
the Fourth Series Burke Bonds pursuant to the Fourth Series Burke Indenture
(each as hereinafter defined) in the case of the new Second Series Bonds, and
(iii) the Fifth Series Burke Bonds pursuant to the Fifth Series Burke Indenture
(each as hereinafter defined) in the case of the new Third Series Bonds. New
Bonds of each such series shall be dated the date of authentication.
The principal of and premium, if any, and interest on the new Bonds of
each such series shall be payable in any coin or currency of the United States
of America which at the time of payment is legal tender for public and private
debts, at the office or agency of the Company in the Borough of Manhattan, The
City of New York, designated for that purpose.
New Bonds of each such series may be transferred at the principal
corporate trust office of the Trustee, in the Borough of Manhattan, The City of
New York. New Bonds of each such series shall be exchangeable for other bonds of
the same series, in the manner and upon the conditions prescribed in the
Indenture, upon the surrender of such new Bonds at said principal corporate
trust office of the Trustee. However, notwithstanding the provisions of Section
2.05 of the Indenture, no charge shall be made upon any transfer or exchange of
new Bonds of any of said series other than for any tax or taxes or other
governmental charge required to be paid by the Company.
Any or all of the new Bonds of each such series shall be redeemable at
any time and from time to time, prior to maturity, upon notice given by mailing
the same, by first class mail postage prepaid, not less than thirty nor more
than forty-five
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<PAGE>
days prior to the date fixed for redemption to each registered holder of a bond
to be redeemed (in whole or in part) at the last address of such holder
appearing on the registry books, at the principal amount thereof and accrued
interest thereon, if any, to the date fixed for redemption, if redeemed by the
operation of Section 4 of the Supplemental Indenture dated as of November 1,
1962 or of the improvement fund provisions of any supplemental indenture or by
the use of proceeds of released property.
SECTION 2. The obligation of the Company to make payments with respect
to the principal of and premium, if any, and interest on the new First Series
Bonds shall be fully or partially, as the case may be, satisfied and discharged,
to the extent that, at the time that any such payment shall be due, the Company
shall have made payments as required by the Company's Note dated September 27,
1995 issued pursuant to Section 3.2 of the Loan Agreement dated as of September
1, 1995 between the Development Authority of Burke County and the Company,
relating to the Third Series Burke Bonds (hereinafter defined), sufficient to
pay fully or partially the then due principal of and premium, if any, and
interest on the Development Authority of Burke County (Georgia) Pollution
Control Revenue Bonds (Georgia Power Company Plant Vogtle Project), Third Series
1995 (hereinafter referred to as the "Third Series Burke Bonds") or there shall
be on deposit with the trustee pursuant to the Trust Indenture dated as of
September 1, 1995 of the Development Authority of Burke County to Bank South,
Atlanta, Georgia, as trustee, relating to the Third Series Burke Bonds
(hereinafter referred to as the "Third Series Burke Indenture"), sufficient
available funds to pay fully or partially the then due principal of and premium,
if any, and interest on the Third Series Burke Bonds. The Trustee may
conclusively presume that the obligation of the Company to make payments with
respect to the principal of and premium, if any, and interest on the new First
Series Bonds shall have been fully satisfied and discharged unless and until the
Trustee shall have received a written notice from the trustee under the Third
Series Burke Indenture stating (i) that timely payment of principal of or
premium, if any, or interest on the Third Series Burke Bonds has not been made,
(ii) that there are not sufficient available funds to make such payment and
(iii) the amount of funds required to make such payment.
In addition to the redemption as provided in Section 1 hereof, the new
First Series Bonds shall also be redeemable in whole upon receipt by the Trustee
of a written demand for the redemption of the new First Series Bonds
(hereinafter called "First Series Redemption Demand") from the trustee under the
Third Series Burke Indenture stating that the principal amount of all the Third
Series Burke Bonds then outstanding under the Third
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<PAGE>
Series Burke Indenture has been declared immediately due and payable pursuant to
the provisions of Section 8.02 of the Third Series Burke Indenture, specifying
the date from which unpaid interest on the Third Series Burke Bonds has then
accrued and stating that such declaration of maturity has not been rescinded.
The Trustee shall within 10 days of receiving the First Series Redemption Demand
mail a copy thereof to the Company stamped or otherwise marked to indicate the
date of receipt by the Trustee. The Company shall fix a redemption date for the
redemption so demanded (herein called the "First Series Demand Redemption") and
shall mail to the Trustee notice of such date at least 30 days prior thereto.
The date fixed for First Series Demand Redemption may be any day not more than
180 days after receipt by the Trustee of the First Series Redemption Demand. If
the Trustee does not receive such notice from the Company within 150 days after
receipt by the Trustee of the First Series Redemption Demand, the date for First
Series Demand Redemption shall be deemed fixed at the 180th day after such
receipt. The Trustee shall mail notice of the date fixed for First Series Demand
Redemption (hereinafter called the "First Series Demand Redemption Notice") to
the trustee under the Third Series Burke Indenture (and the registered holders
of the new First Series Bonds if other than said trustee) not more than 10 nor
less than 5 days prior to the date fixed for First Series Demand Redemption,
provided, however, that the Trustee shall mail no First Series Demand Redemption
Notice (and no First Series Demand Redemption shall be made) if prior to the
mailing of the First Series Demand Redemption Notice the Trustee shall have
received written notice of rescission of the First Series Redemption Demand from
the trustee under the Third Series Burke Indenture. First Series Demand
Redemption of the new First Series Bonds shall be at the principal amount
thereof, plus accrued interest thereon to the date fixed for redemption, and
such amount shall become and be due and payable on the date fixed for First
Series Demand Redemption as above provided. Anything in this paragraph contained
to the contrary notwithstanding, if, after mailing of the First Series Demand
Redemption Notice and prior to the date fixed for First Series Demand
Redemption, the Trustee shall have been advised in writing by the trustee under
the Third Series Burke Indenture that the First Series Redemption Demand has
been rescinded, the First Series Demand Redemption Notice shall thereupon,
without further act of the Trustee or the Company, be rescinded and become null
and void for all purposes hereunder and no redemption of the new First Series
Bonds and no payments in respect thereof as specified in the First Series Demand
Redemption Notice shall be effected or required.
The new First Series Bonds shall also be redeemable in whole at any
time, or in part from time to time (hereinafter called the
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<PAGE>
"First Series Regular Redemption"), upon receipt by the Trustee of a written
demand (hereinafter referred to as the "First Series Regular Redemption Demand")
from the trustee under the Third Series Burke Indenture stating: (1) the
principal amount of Third Series Burke Bonds to be redeemed pursuant to the
optional redemption provisions of the Third Series Burke Bonds and the Third
Series Burke Indenture; (2) the date of such redemption and that notice thereof
has been given as required by the Third Series Burke Indenture; (3) that the
Trustee shall call for redemption on the stated date fixed for redemption of the
Third Series Burke Bonds a principal amount of the new First Series Bonds equal
to the principal amount of Third Series Burke Bonds to be redeemed; and (4) that
the trustee under the Third Series Burke Indenture, as holder of all the new
First Series Bonds then outstanding, waives notice of such redemption. The
Trustee may conclusively presume the statements contained in the First Series
Regular Redemption Demand to be correct. First Series Regular Redemption of the
new First Series Bonds shall be at the principal amount thereof and accrued
interest thereon to the date fixed for redemption, together with a premium equal
to the redemption premium (if any) payable upon such redemption of the Third
Series Burke Bonds, and such amount shall become and be due and, subject to the
first paragraph of this Section 2, payable on the date fixed for such First
Series Regular Redemption, which shall be the date specified pursuant to item
(2) of the First Series Regular Redemption Demand as above provided.
SECTION 3. The obligation of the Company to make payments with respect
to the principal of and premium, if any, and interest on the new Second Series
Bonds shall be fully or partially, as the case may be, satisfied and discharged,
to the extent that, at the time that any such payment shall be due, the Company
shall have made payments as required by the Company's Note dated September 27,
1995 issued pursuant to Section 3.2 of the Loan Agreement dated as of September
1, 1995 between the Development Authority of Burke County and the Company,
relating to the Fourth Series Burke Bonds (hereinafter defined), sufficient to
pay fully or partially the then due principal of and premium, if any, and
interest on the Development Authority of Burke County (Georgia) Pollution
Control Revenue Bonds (Georgia Power Company Plant Vogtle Project), Fourth
Series 1995 (hereinafter referred to as the "Fourth Series Burke Bonds") or
there shall be on deposit with the trustee pursuant to the Trust Indenture dated
as of September 1, 1995 of the Development Authority of Burke County to Bank
South, Atlanta, Georgia, as trustee, relating to the Fourth Series Burke Bonds
(hereinafter referred to as the "Fourth Series Burke Indenture"), sufficient
available funds to pay fully or partially the then due principal of and premium,
if any, and interest on the Fourth Series Burke
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<PAGE>
Bonds. The Trustee may conclusively presume that the obligation of the Company
to make payments with respect to the principal of and premium, if any, and
interest on the new Second Series Bonds shall have been fully satisfied and
discharged unless and until the Trustee shall have received a written notice
from the trustee under the Fourth Series Burke Indenture stating (i) that timely
payment of principal of or premium, if any, or interest on the Fourth Series
Burke Bonds has not been made, (ii) that there are not sufficient available
funds to make such payment and (iii) the amount of funds required to make such
payment.
In addition to the redemption as provided in Section 1 hereof, the new
Second Series Bonds shall also be redeemable in whole upon receipt by the
Trustee of a written demand for the redemption of the new Second Series Bonds
(hereinafter called "Second Series Redemption Demand") from the trustee under
the Fourth Series Burke Indenture stating that the principal amount of all the
Fourth Series Burke Bonds then outstanding under the Fourth Series Burke
Indenture has been declared immediately due and payable pursuant to the
provisions of Section 8.02 of the Fourth Series Burke Indenture, specifying the
date from which unpaid interest on the Fourth Series Burke Bonds has then
accrued and stating that such declaration of maturity has not been rescinded.
The Trustee shall within 10 days of receiving the Second Series Redemption
Demand mail a copy thereof to the Company stamped or otherwise marked to
indicate the date of receipt by the Trustee. The Company shall fix a redemption
date for the redemption so demanded (herein called the "Second Series Demand
Redemption") and shall mail to the Trustee notice of such date at least 30 days
prior thereto. The date fixed for Second Series Demand Redemption may be any day
not more than 180 days after receipt by the Trustee of the Second Series
Redemption Demand. If the Trustee does not receive such notice from the Company
within 150 days after receipt by the Trustee of the Second Series Redemption
Demand, the date for Second Series Demand Redemption shall be deemed fixed at
the 180th day after such receipt. The Trustee shall mail notice of the date
fixed for Second Series Demand Redemption (hereinafter called the "Second Series
Demand Redemption Notice") to the trustee under the Fourth Series Burke
Indenture (and the registered holders of the new Second Series Bonds if other
than said trustee) not more than 10 nor less than 5 days prior to the date fixed
for Second Series Demand Redemption, provided, however, that the Trustee shall
mail no Second Series Demand Redemption Notice (and no Second Series Demand
Redemption shall be made) if prior to the mailing of the Second Series Demand
Redemption Notice the Trustee shall have received written notice of rescission
of the Second Series Redemption Demand from the trustee under the Fourth Series
Burke Indenture. Second Series Demand Redemption of the new
-13-
<PAGE>
Second Series Bonds shall be at the principal amount thereof, plus accrued
interest thereon to the date fixed for redemption, and such amount shall become
and be due and payable on the date fixed for Second Series Demand Redemption as
above provided. Anything in this paragraph contained to the contrary
notwithstanding, if, after mailing of the Second Series Demand Redemption Notice
and prior to the date fixed for Second Series Demand Redemption, the Trustee
shall have been advised in writing by the trustee under the Fourth Series Burke
Indenture that the Second Series Redemption Demand has been rescinded, the
Second Series Demand Redemption Notice shall thereupon, without further act of
the Trustee or the Company, be rescinded and become null and void for all
purposes hereunder and no redemption of the new Second Series Bonds and no
payments in respect thereof as specified in the Second Series Demand Redemption
Notice shall be effected or required.
The new Second Series Bonds shall also be redeemable in whole at any
time, or in part from time to time (hereinafter called the "Second Series
Regular Redemption"), upon receipt by the Trustee of a written demand
(hereinafter referred to as the "Second Series Regular Redemption Demand") from
the trustee under the Fourth Series Burke Indenture stating: (1) the principal
amount of Fourth Series Burke Bonds to be redeemed pursuant to the optional
redemption provisions of the Fourth Series Burke Bonds and the Fourth Series
Burke Indenture; (2) the date of such redemption and that notice thereof has
been given as required by the Fourth Series Burke Indenture; (3) that the
Trustee shall call for redemption on the stated date fixed for redemption of the
Fourth Series Burke Bonds a principal amount of the new Second Series Bonds
equal to the principal amount of Fourth Series Burke Bonds to be redeemed; and
(4) that the trustee under the Fourth Series Burke Indenture, as holder of all
the new Second Series Bonds then outstanding, waives notice of such redemption.
The Trustee may conclusively presume the statements contained in the Second
Series Regular Redemption Demand to be correct. Second Series Regular Redemption
of the new Second Series Bonds shall be at the principal amount thereof and
accrued interest thereon to the date fixed for redemption, together with a
premium equal to the redemption premium (if any) payable upon such redemption of
the Fourth Series Burke Bonds, and such amount shall become and be due and,
subject to the first paragraph of this Section 3, payable on the date fixed for
such Second Series Regular Redemption, which shall be the date specified
pursuant to item (2) of the Second Series Regular Redemption Demand as above
provided.
SECTION 4. The obligation of the Company to make payments
with respect to the principal of and premium, if any, and
-14-
<PAGE>
interest on the new Third Series Bonds shall be fully or partially, as the case
may be, satisfied and discharged, to the extent that, at the time that any such
payment shall be due, the Company shall have made payments as required by the
Company's Note dated September 27, 1995 issued pursuant to Section 3.2 of the
Loan Agreement dated as of September 1, 1995 between the Development Authority
of Burke County and the Company, relating to the Fifth Series Burke Bonds
(hereinafter defined), sufficient to pay fully or partially the then due
principal of and premium, if any, and interest on the Development Authority of
Burke County (Georgia) Pollution Control Revenue Bonds (Georgia Power Company
Plant Vogtle Project), Fifth Series 1995 (hereinafter referred to as the "Fifth
Series Burke Bonds") or there shall be on deposit with the trustee pursuant to
the Trust Indenture dated as of September 1, 1995 of the Development Authority
of Burke County to Bank South, Atlanta, Georgia, as trustee, relating to the
Fifth Series Burke Bonds (hereinafter referred to as the "Fifth Series Burke
Indenture"), sufficient available funds to pay fully or partially the then due
principal of and premium, if any, and interest on the Fifth Series Burke Bonds.
The Trustee may conclusively presume that the obligation of the Company to make
payments with respect to the principal of and premium, if any, and interest on
the new Third Series Bonds shall have been fully satisfied and discharged unless
and until the Trustee shall have received a written notice from the trustee
under the Fifth Series Burke Indenture stating (i) that timely payment of
principal of or premium, if any, or interest on the Fifth Series Burke Bonds has
not been made, (ii) that there are not sufficient available funds to make such
payment and (iii) the amount of funds required to make such payment.
In addition to the redemption as provided in Section 1 hereof, the new
Third Series Bonds shall also be redeemable in whole upon receipt by the Trustee
of a written demand for the redemption of the new Third Series Bonds
(hereinafter called "Third Series Redemption Demand") from the trustee under the
Fifth Series Burke Indenture stating that the principal amount of all the Fifth
Series Burke Bonds then outstanding under the Fifth Series Burke Indenture has
been declared immediately due and payable pursuant to the provisions of Section
8.02 of the Fifth Series Burke Indenture, specifying the date from which unpaid
interest on the Fifth Series Burke Bonds has then accrued and stating that such
declaration of maturity has not been rescinded. The Trustee shall within 10 days
of receiving the Third Series Redemption Demand mail a copy thereof to the
Company stamped or otherwise marked to indicate the date of receipt by the
Trustee. The Company shall fix a redemption date for the redemption so demanded
(herein called the "Third Series Demand Redemption") and shall mail to the
Trustee notice of such date at least 30 days
-15-
<PAGE>
prior thereto. The date fixed for Third Series Demand Redemption may be any day
not more than 180 days after receipt by the Trustee of the Third Series
Redemption Demand. If the Trustee does not receive such notice from the Company
within 150 days after receipt by the Trustee of the Third Series Redemption
Demand, the date for Third Series Demand Redemption shall be deemed fixed at the
180th day after such receipt. The Trustee shall mail notice of the date fixed
for Third Series Demand Redemption (hereinafter called the "Third Series Demand
Redemption Notice") to the trustee under the Third Series Burke Indenture (and
the registered holders of the new Third Series Bonds if other than said trustee)
not more than 10 nor less than 5 days prior to the date fixed for Third Series
Demand Redemption, provided, however, that the Trustee shall mail no Third
Series Demand Redemption Notice (and no Third Series Demand Redemption shall be
made) if prior to the mailing of the Third Series Demand Redemption Notice the
Trustee shall have received written notice of rescission of the Third Series
Redemption Demand from the trustee under the Fifth Series Burke Indenture. Third
Series Demand Redemption of the new Third Series Bonds shall be at the principal
amount thereof, plus accrued interest thereon to the date fixed for redemption,
and such amount shall become and be due and payable on the date fixed for Third
Series Demand Redemption as above provided. Anything in this paragraph contained
to the contrary notwithstanding, if, after mailing of the Third Series Demand
Redemption Notice and prior to the date fixed for Third Series Demand
Redemption, the Trustee shall have been advised in writing by the trustee under
the Fifth Series Burke Indenture that the Third Series Redemption Demand has
been rescinded, the Third Series Demand Redemption Notice shall thereupon,
without further act of the Trustee or the Company, be rescinded and become null
and void for all purposes hereunder and no redemption of the new Third Series
Bonds and no payments in respect thereof as specified in the Third Series Demand
Redemption Notice shall be effected or required.
The new Third Series Bonds shall also be redeemable in whole at any
time, or in part from time to time (hereinafter called the "Third Series Regular
Redemption"), upon receipt by the Trustee of a written demand (hereinafter
referred to as the "Third Series Regular Redemption Demand") from the trustee
under the Fifth Series Burke Indenture stating: (1) the principal amount of
Fifth Series Burke Bonds to be redeemed pursuant to the optional redemption
provisions of the Fifth Series Burke Bonds and the Fifth Series Burke Indenture;
(2) the date of such redemption and that notice thereof has been given as
required by the Fifth Series Burke Indenture; (3) that the Trustee shall call
for redemption on the stated date fixed for redemption of the Fifth Series Burke
Bonds a principal amount of the new Third Series
-16-
<PAGE>
Bonds equal to the principal amount of Fifth Series Burke Bonds to be redeemed;
and (4) that the trustee under the Fifth Series Burke Indenture, as holder of
all the new Third Series Bonds then outstanding, waives notice of such
redemption. The Trustee may conclusively presume the statements contained in the
Third Series Regular Redemption Demand to be correct. Third Series Regular
Redemption of the new Third Series Bonds shall be at the principal amount
thereof and accrued interest thereon to the date fixed for redemption, together
with a premium equal to the redemption premium (if any) payable upon such
redemption of the Fifth Series Burke Bonds, and such amount shall become and be
due and, subject to the first paragraph of this Section 4, payable on the date
fixed for such Third Series Regular Redemption, which shall be the date
specified pursuant to item (2) of the Third Series Regular Redemption Demand as
above provided.
SECTION 5. The Company covenants that the provisions of Section 4 of
the Supplemental Indenture dated as of November 1, 1962, shall be in full force
and effect so long as any new Bonds of any series shall be outstanding under the
Indenture.
SECTION 6. As supplemented by this Supplemental Indenture, the
Indenture is in all respects ratified and confirmed, and the Indenture and this
Supplemental Indenture shall be read, taken and construed as one and the same
instrument.
SECTION 7. Nothing in this Supplemental Indenture contained shall, or
shall be construed to, confer upon any person other than a holder of bonds
issued under the Indenture, as supplemented and amended, the Company and the
Trustee any right or interest to avail himself of any benefit under any
provision of the Indenture or of this Supplemental Indenture.
SECTION 8. The Trustee assumes no responsibility for or in respect of
the validity or sufficiency of this Supplemental Indenture or the due execution
hereof by the Company or for or in respect of the recitals and statements
contained herein, all of which recitals and statements are made solely by the
Company.
SECTION 9. This Supplemental Indenture may be executed in several
counterparts and all such counterparts executed and delivered, each as an
original, shall constitute but one and the same instrument.
SECTION 10. Although this Supplemental Indenture, for convenience and
for the purposes of reference, is dated as of the day and year first above
written, the actual dates of execution by the Company and the Trustee are as
indicated by their respective acknowledgments hereto annexed.
-17-
<PAGE>
IN WITNESS WHEREOF, said Georgia Power Company has caused this
Supplemental Indenture to be executed in its corporate name by its President or
one of its Vice Presidents and its corporate seal to be hereunto affixed and to
be attested by its Secretary or one of its Assistant Secretaries, and said
Chemical Bank, to evidence its acceptance hereof, has caused this Supplemental
Indenture to be executed in its corporate name by one of its Vice Presidents,
Senior Trust Officers or Trust Officers and its corporate seal to be hereunto
affixed and to be attested by one of its Senior Trust Officers, Trust Officers,
Assistant Trust Officers or Assistant Secretaries, in several counterparts, all
as of the day and year first above written.
GEORGIA POWER COMPANY
By:
Vice President
Attest:
Assistant Corporate Secretary
Signed, sealed and delivered this 21st day of September, 1995 by Georgia Power
Company in the County of Fulton, State of Georgia, in the presence of
Unofficial Witness
Notary Public, Henry County, Georgia
My Commission Expires April 20, 1999
(signatures continued on next page)
<PAGE>
CHEMICAL BANK
By:
Vice President
Attest:
Senior Trust Officer
Signed, sealed and delivered this 22nd day of September, 1995 by Chemical Bank
in the County of New York, State of New York, in the presence of
Unofficial Witness
ANNABELLE DELUCA
Notary Public, State of New York
No. 01 DE 5013759
Qualified in Kings County
Certificate filed in New York County
Commission Expires July 15, 1997
<PAGE>
STATE OF GEORGIA )
) SS.:
COUNTY OF FULTON )
On the 21st day of September, 1995, personally appeared before me
Angela K. Page, a Notary Public in and for the State and County aforesaid, Linda
J. Hein, who made oath and said that she was present and saw the corporate seal
of Georgia Power Company affixed to the above written instrument, that she saw
Judy M. Anderson, Vice President, with Cherry C. Hudgins, Assistant Corporate
Secretary, known to her to be such officers of said corporation respectively,
attest the same, and that she, deponent, with Angela K. Page witnessed the
execution and delivery of the said instrument as the free act and deed of said
Georgia Power Company.
Subscribed and sworn to )
before me this 21st day of )
September, 1995 )
Notary Public, Henry County, Georgia
My Commission Expires April 20, 1999
<PAGE>
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
On the 22nd day of September, 1995, personally appeared before me
Annabelle DeLuca, a Notary Public in and for the State and County aforesaid, B.
Kelly, who made oath and said that she was present and saw the corporate seal of
Chemical Bank affixed to the above written instrument, that she saw G.
McFarlane, Vice President, with R. Lorenzen, Senior Trust Officer, known to her
to be such officers of said corporation respectively, attest the same, and that
she, deponent, with Annabelle DeLuca, witnessed the execution and delivery of
the said instrument as the free act and deed of said Chemical Bank.
Subscribed and sworn to )
before me this 22nd day of )
September, 1995 )
ANNABELLE DELUCA
Notary Public, State of New York
No. 01 DE 5013759
Qualified in Kings County
Certificate filed in New York County
Commission Expires July 15, 1997
<PAGE>
STATE OF GEORGIA )
) SS.:
COUNTY OF FULTON )
On the 21st day of September, in the year one thousand nine hundred and
ninety-five, before me personally came Judy M. Anderson, to me known, who, being
by me duly sworn, did depose and say that she resides at 199 14th Street, N.E.,
Atlanta, Georgia; that she is a Vice President of Georgia Power Company, one of
the corporations described in and which executed the foregoing instrument; that
she knows the seal of said corporation; that the seal affixed to said instrument
is such corporate seal; that it was so affixed by order of the Board of
Directors of said corporation; and that she signed her name thereto by like
order.
Notary Public, Henry
County, Georgia
My Commission Expires
April 20, 1999
<PAGE>
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
On the 22nd day of September, in the year one thousand nine hundred and
ninety-five, before me personally came G. McFarlane, to me known, who, being by
me duly sworn, did depose and say that he resides at 1678 N. Gardiner Drive, Bay
Shore, New York; that he is a Vice President of Chemical Bank, one of the
corporations described in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by order of the Board of Directors
of said corporation; and that he signed his name thereto by like order.
ANNABELLE DELUCA
Notary Public, State of
New York
No. 01 DE 5013759
Qualified in Kings County
Certificate filed in New
York County
Commission Expires
July 15, 1997
<PAGE>
STATE OF GEORGIA )
) SS.:
COUNTY OF FULTON )
On the 21st day of September, 1995, before me appeared Judy M.
Anderson, to me personally known, who, being by me duly sworn, did say that she
is a Vice President of Georgia Power Company, and that the seal affixed to said
instrument is the corporate seal of said corporation and that said instrument
was signed and sealed in behalf of said corporation by authority of its Board of
Directors, and that said Judy M. Anderson acknowledged said instrument to be the
free act and deed of said corporation.
Given under my hand this 21st day of September, 1995.
Notary Public, Henry
County, Georgia
My Commission Expires
April 20, 1999
<PAGE>
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
On the 22nd day of September, 1995, before me appeared G. McFarlane, to
me personally known, who, being by me duly sworn, did say that he is a Vice
President of Chemical Bank, and that the seal affixed to said instrument is the
corporate seal of said corporation and that said instrument was signed and
sealed in behalf of said corporation by authority of its Board of Directors, and
that said G. McFarlane acknowledged said instrument to be the free act and deed
of said corporation.
Given under my hand this 22nd day of September, 1995.
ANNABELLE DELUCA
Notary Public, State of
New York
No. 01 DE 5013759
Qualified in Kings County
Certificate filed in New
York County
Commission Expires
July 15, 1997
Exhibit 4(c)6
GEORGIA POWER COMPANY
to
CHEMICAL BANK
(Successor by Merger to Chemical Bank New York Trust
Company and The New York Trust Company),
Trustee
SUPPLEMENTAL INDENTURE
Dated as of October 15, 1995
Providing among other things for
FIRST MORTGAGE BONDS
4 3/8% Pollution Control Series due November 1, 2000
<PAGE>
SUPPLEMENTAL INDENTURE, dated as of October 15, 1995, made and entered
into by and between GEORGIA POWER COMPANY, a corporation organized and existing
under the laws of the State of Georgia with its principal office in Atlanta,
Fulton County, Georgia (hereinafter commonly referred to as the "Company"), and
CHEMICAL BANK (successor by merger to Chemical Bank New York Trust Company and
The New York Trust Company), a corporation organized and existing under the laws
of the State of New York, with its principal corporate trust office in the
Borough of Manhattan, The City of New York (hereinafter commonly referred to as
the "Trustee"), as Trustee under the Indenture dated as of March 1, 1941
originally entered into between the Company and The New York Trust Company, as
Trustee (hereinafter sometimes referred to as the "Original Indenture" and said
The New York Trust Company being hereinafter sometimes referred to as the
"Original Trustee"), securing bonds issued and to be issued as provided therein,
which Original Indenture has heretofore been supplemented and amended by various
supplemental indentures (which Original Indenture as so supplemented and amended
is hereinafter sometimes referred to as the "Indenture").
WHEREAS the Company and the Original Trustee have executed and
delivered the Original Indenture for the purpose of securing an issue of bonds
of the 3-1/2% Series due 1971 described therein and such additional bonds as may
from time to time be issued under and in accordance with the terms of the
Indenture, the aggregate principal amount of bonds to be secured thereby being
presently limited to $5,000,000,000 at any one time outstanding (except as
provided in Section 2.01 of the Indenture), and the Original Indenture is of
record in the public office of each county in the States of Georgia, Alabama,
Tennessee and South Carolina, and in the public office of the District of
Columbia, in which this Supplemental Indenture is to be recorded, and the
Original Indenture is on file at the principal corporate trust office of the
Trustee; and
WHEREAS the Company and the Trustee have executed and delivered various
supplemental indentures for the purpose, among others, of further securing said
bonds and of creating the bonds of other series described therein, which
supplemental indentures described and set forth additional property conveyed
thereby and are also of record in the public offices of some or all of the
counties in the States of Georgia, Alabama, Tennessee and South Carolina in
which this Supplemental Indenture is to be recorded, and one of which
supplemental indentures is also of record in the public office of the District
of Columbia, and said supplemental indentures are also on file at the principal
corporate trust office of the Trustee; and
WHEREAS the Company and the Trustee have executed and delivered the
Supplemental Indenture dated as of May 15, 1991, by which the third paragraph of
Section 1.02 of the Indenture was amended to read as follows:
<PAGE>
"The term 'Board of Directors' shall mean the Board of
Directors of the Company or any committee of the Board of Directors of
the Company authorized, with respect to any particular matter, to
exercise the power of the Board of Directors of the Company."; and
WHEREAS the Indenture provides for the issuance of bonds thereunder in
one or more series and the Company, by appropriate corporate action in
conformity with the terms of the Indenture, has duly determined to create a
series of bonds under the Indenture to be designated as "4 3/8% Pollution
Control Series due November 1, 2000" (hereinafter sometimes referred to as the
"new Bonds"), each of which bonds shall also bear the descriptive title "First
Mortgage Bond", the bonds of such series to bear interest at the annual rate and
to mature on the date designated in the title thereof; and
WHEREAS by a Plan of Merger dated June 11, 1959, effective September 8,
1959, between The New York Trust Company and Chemical Corn Exchange Bank, said
The New York Trust Company was merged into said Chemical Corn Exchange Bank
which continued under the name and style of Chemical Bank New York Trust
Company; and by a Plan of Merger dated November 26, 1968, effective February 17,
1969, among Chemical New York Corporation, Chemical Bank New York Trust Company
and Chemical Bank, said Chemical Bank New York Trust Company was merged into
said Chemical Bank which continued under the name and style of Chemical Bank;
and by virtue of said mergers Chemical Bank has become successor to The New York
Trust Company and Chemical Bank New York Trust Company, as Trustee under the
Indenture, and has become vested with all of the title to the mortgaged property
and trust estate; and with the trusts, powers, discretions, immunities,
privileges and all other matters as were vested in said The New York Trust
Company and said Chemical Bank New York Trust Company under the Indenture, with
like effect as if originally named as Trustee therein; and
WHEREAS each of the new Bonds is to be substantially in the following
form, with appropriate insertions and deletions, to wit:
-2-
<PAGE>
[FORM OF NEW BOND]
GEORGIA POWER COMPANY
FIRST MORTGAGE BOND, 4 3/8% POLLUTION CONTROL SERIES
DUE NOVEMBER 1, 2000
No. $
Georgia Power Company, a Georgia corporation (hereinafter called the
"Company"), for value received, hereby promises to pay to Bank South, Atlanta,
Georgia (as trustee under a Trust Indenture dated as of October 15, 1995 of the
Development Authority of Burke County, relating to the Revenue Bonds
(hereinafter mentioned)), or registered assigns, the principal sum of
_____________________ Dollars on November 1, 2000, and to pay to the registered
owner hereof interest on said sum from the latest semi-annual interest payment
date to which interest has been paid on the bonds of this series preceding the
date hereof, unless the date hereof be an interest payment date to which
interest is being paid, in which case from the date hereof, or unless the date
hereof is prior to May 1, 1996, in which case from October 15, 1995, at the rate
per annum, until the principal hereof shall have become due and payable,
specified in the title of this bond, payable on May 1 and November 1 in each
year.
The obligation of the Company to make payments with respect to the
principal of and premium, if any, and interest on bonds of this series shall be
fully or partially, as the case may be, satisfied and discharged to the extent
that, at any time that any such payment shall be due, the Company shall have
made payments as required by the Company's Note dated November 8, 1995 issued
pursuant to Section 3.2 of the Loan Agreement dated as of October 15, 1995
between the Development Authority of Burke County and the Company, relating to
the Revenue Bonds (hereinafter mentioned), sufficient to pay fully or partially
the then due principal of and premium, if any, and interest on the Development
Authority of Burke County (Georgia) Pollution Control Revenue Bonds (Georgia
Power Company Plant Vogtle Project), Sixth Series 1995 (hereinafter referred to
as "Revenue Bonds") or there shall be in the Bond Fund established pursuant to
the Trust Indenture dated as of October 15, 1995 of the Development Authority of
Burke County to Bank South, Atlanta, Georgia, as trustee, relating to the
Revenue Bonds (hereinafter referred to as the "Revenue Indenture"), sufficient
available funds to pay fully or partially the then due principal of and premium,
if any, and interest on the Revenue Bonds.
-3-
<PAGE>
This bond is one of the bonds issued and to be issued from time to time
under and in accordance with and all secured by an indenture of mortgage or deed
of trust dated as of March 1, 1941 given by the Company to The New York Trust
Company, to which Chemical Bank is successor by merger (hereinafter sometimes
referred to as the "Trustee"), as Trustee, and indentures supplemental thereto,
to which indenture and indentures supplemental thereto (hereinafter referred to
collectively as the "Indenture") reference is hereby made for a description of
the property mortgaged and pledged, the nature and extent of the security and
the rights, duties and immunities thereunder of the Trustee and the rights of
the holders of said bonds and of the Trustee and of the Company in respect of
such security. By the terms of the Indenture the bonds to be secured thereby are
issuable in series which may vary as to date, amount, date of maturity, rate of
interest and in other respects as in the Indenture provided.
Upon notice given by mailing the same, by first class mail postage
prepaid, not less than thirty nor more than forty-five days prior to the date
fixed for redemption to each registered holder of a bond to be redeemed (in
whole or in part) at the last address of such holder appearing on the registry
books, any or all of the bonds of this series may be redeemed by the Company at
any time and from time to time by the payment of the principal amount thereof
and accrued interest thereon to the date fixed for redemption, if redeemed by
the operation of the improvement fund or the replacement fund provisions of the
Indenture or by the use of proceeds of released property, as more fully set
forth in the Indenture.
In the manner provided in the Indenture, the bonds of this series shall
also be redeemable in whole, by payment of the principal amount thereof plus
accrued interest thereon to the date fixed for redemption, upon receipt by the
Trustee of a written demand from the trustee under the Revenue Indenture stating
that the principal amount of all the Revenue Bonds then outstanding under the
Revenue Indenture has been declared immediately due and payable pursuant to the
provisions of Section 8.02 of the Revenue Indenture. As provided in the
Indenture, the date fixed for such redemption may be not more than 180 days
after receipt by the Trustee of the aforesaid written demand and shall be
specified in a notice of redemption given not more than 10 nor less than 5 days
prior to the date so fixed for such redemption. As in the Indenture provided,
such notice of redemption shall be rescinded and become null and void for all
purposes under the Indenture upon rescission of the aforesaid written demand or
the aforesaid declaration of maturity under the Revenue Indenture, and thereupon
no redemption of the bonds of this series and no payments in respect thereof as
-4-
<PAGE>
specified in such notice of redemption shall be effected or
required.
In case of certain defaults as specified in the Indenture, the
principal of this bond may be declared or may become due and payable on the
conditions, at the time, in the manner and with the effect provided in the
Indenture.
No recourse shall be had for the payment of the principal of or
premium, if any, or interest on this bond, or for any claim based hereon, or
otherwise in respect hereof or of the Indenture, to or against any incorporator,
stockholder, director or officer, past, present or future, as such, of the
Company, or of any predecessor or successor company, either directly or through
the Company, or such predecessor or successor company, under any constitution or
statute or rule of law, or by the enforcement of any assessment or penalty, or
otherwise, all such liability of incorporators, stockholders, directors and
officers being waived and released by the holder and owner hereof by the
acceptance of this bond and being likewise waived and released by the terms of
the Indenture.
This bond is transferable by the registered owner hereof, in person or
by attorney duly authorized, at the principal corporate trust office of the
Trustee, in the Borough of Manhattan, The City of New York, but only in the
manner prescribed in the Indenture, upon the surrender and cancellation of this
bond, and upon any such transfer a new registered bond or bonds, without
coupons, of the same series and maturity date and for the same aggregate
principal amount, in authorized denominations, will be issued to the transferee
in exchange herefor. The Company and the Trustee may deem and treat the person
in whose name this bond is registered as the absolute owner for the purpose of
receiving payment of or on account of the principal, premium, if any, and
interest due hereon and for all other purposes. Registered bonds of this series
shall be exchangeable for registered bonds of other authorized denominations
having the same aggregate principal amount, in the manner and upon the
conditions prescribed in the Indenture. However, notwithstanding the provisions
of the Indenture, no charge shall be made upon any transfer or exchange of bonds
of this series other than for any tax or taxes or other governmental charge
required to be paid by the Company.
This bond shall not be valid or become obligatory for any purpose
unless and until it shall have been authenticated by the execution by the
Trustee or its successor in trust under the Indenture of the certificate hereon.
-5-
<PAGE>
IN WITNESS WHEREOF, Georgia Power Company has caused this bond to be
executed in its name by its President or one of its Vice Presidents by his
signature or a facsimile thereof, and its corporate seal or a facsimile thereof
to be hereto affixed and attested by its Secretary or one of its Assistant
Secretaries by his signature or a facsimile thereof.
Dated,
GEORGIA POWER COMPANY
By:
Attest:
-6-
<PAGE>
TRUSTEE'S CERTIFICATE
This bond is one of the bonds, of the series designated therein,
described in the within-mentioned Indenture.
CHEMICAL BANK, as Trustee
By:
Authorized Officer
AND WHEREAS all acts and things necessary to make the new Bonds, when
authenticated by the Trustee and issued as in the Indenture and this
Supplemental Indenture provided, the valid, binding and legal obligations of the
Company, and to constitute the Indenture and this Supplemental Indenture valid,
binding and legal instruments for the security thereof, have been done and
performed, and the creation, execution and delivery of the Indenture and this
Supplemental Indenture and the creation, execution and issue of bonds subject to
the terms hereof and of the Indenture, have in all respects been duly
authorized;
NOW, THEREFORE, in consideration of the premises, and of the acceptance
and purchase by the holders thereof of the bonds issued and to be issued under
the Indenture and of the sum of One Dollar duly paid by the Trustee to the
Company, and of other good and valuable considerations, the receipt whereof is
hereby acknowledged, and for the purpose of further securing the due and
punctual payment of the principal of and premium, if any, and interest on the
bonds issued and now outstanding under the Indenture, and the $50,000,000
principal amount of new Bonds proposed to be issued and all other bonds which
shall be issued under the Indenture, or the Indenture as supplemented and
amended, and for the purpose of further securing the faithful performance and
observance of all covenants and conditions therein and in any indenture
supplemental thereto set forth, the Company has given, granted, bargained, sold,
transferred, assigned, hypothecated, pledged, mortgaged, warranted, aliened and
conveyed and by these presents does give, grant, bargain, sell, transfer,
assign, hypothecate, pledge, mortgage, warrant, alien and convey unto Chemical
Bank, as Trustee, as provided in the Indenture, and its successor or successors
in the trust thereby and hereby created, and to its or their assigns forever,
all the right, title and interest of the Company in and to all premises,
property, franchises and rights of every kind and description, real, personal
and mixed, tangible and intangible, now owned or hereafter acquired by the
Company (excepting,
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<PAGE>
however, that which is by the Indenture expressly reserved from the lien and
effect thereof), including but not limited to the property described in Exhibit
"A" attached hereto and by this reference made a part hereof; unless otherwise
noted, such property is located in the State of Georgia and unless otherwise
noted, references herein to a county or counties shall mean such county or
counties in the State of Georgia.
TOGETHER WITH all and singular the tenements, hereditaments and
appurtenances belonging or in anywise appertaining to the property, rights and
franchises or any thereof, referred to in the foregoing granting clauses, with
the reversion and reversions, remainder and remainders and (subject to the
provisions of Article X of the Indenture) the tolls, rents, revenues, issues,
earnings, income, products and profits thereof, and all the estate, right, title
and interest and claim whatsoever, at law as well as in equity, which the
Company now has or may hereafter acquire in and to the aforesaid property,
rights and franchises and every part and parcel thereof.
TO HAVE AND TO HOLD all said property, rights and franchises hereby
conveyed, assigned, pledged or mortgaged, or intended so to be, unto the
Trustee, its successor or successors in trust, and their assigns forever;
BUT IN TRUST, NEVERTHELESS, with power of sale, for the equal and
proportionate benefit and security of the holders of all bonds and interest
coupons now or hereafter issued under the Indenture, as supplemented and
amended, pursuant to the provisions thereof, and for the enforcement of the
payment of said bonds and coupons when payable and for the performance of and
compliance with the covenants and conditions of the Indenture, as supplemented
and amended, without any preference, distinction or priority as to lien or
otherwise of any bond or bonds over others by reason of the difference in time
of the actual issue, sale or negotiation thereof or for any other reason
whatsoever, except as otherwise expressly provided in the Indenture, as
supplemented and amended; and so that each and every bond now or hereafter
issued thereunder shall have the same lien; and so that the principal of and
premium, if any, and interest on every such bond shall, subject to the terms
thereof, be equally and proportionately secured thereby and hereby, as if it had
been made, executed, delivered, sold and negotiated simultaneously with the
execution and delivery of the Original Indenture.
AND IT IS EXPRESSLY DECLARED that all bonds issued and secured under
the Indenture and hereunder are to be issued, authenticated and delivered, and
all said property, rights and
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<PAGE>
franchises hereby and by the Indenture conveyed, assigned, pledged or mortgaged,
or intended so to be (including all the right, title and interest of the Company
in and to any and all premises, property, franchises and rights of every kind
and description, real, personal and mixed, tangible and intangible, thereafter
acquired by the Company and whether or not specifically described in the
Original Indenture or in any indenture supplemental thereto, except any therein
expressly excepted), are to be dealt with and disposed of, under, upon and
subject to the terms, conditions, stipulations, covenants, agreements, trusts
and uses and purposes expressed in the Indenture and herein, and it is hereby
agreed as follows:
SECTION 1. There is hereby created a series of bonds designated as
hereinabove in the fourth Whereas clause set forth, each of which shall contain
suitable provisions with respect to the matters hereinafter in this Section
specified, and the form thereof shall be substantially as hereinbefore set
forth. New Bonds shall mature on the date specified in the title thereof, and
the definitive bonds of such series may be issued only as registered bonds
without coupons. New Bonds shall be in such denominations as the Board of
Directors shall approve, and execution and delivery to the Trustee for
authentication shall be conclusive evidence of such approval. The serial numbers
of new Bonds shall be such as may be approved by any officer of the Company, the
execution thereof by any such officer to be conclusive evidence of such
approval.
New Bonds, until the principal thereof shall have become due and
payable, shall bear interest at the annual rate designated in the title thereof,
payable semi-annually on May 1 and November 1 in each year, commencing May 1,
1996. New Bonds shall be dated the date of authentication.
The principal of and premium, if any, and interest on the new Bonds
shall be payable in any coin or currency of the United States of America which
at the time of payment is legal tender for public and private debts, at the
office or agency of the Company in the Borough of Manhattan, The City of New
York, designated for that purpose.
New Bonds may be transferred at the principal corporate trust office of
the Trustee, in the Borough of Manhattan, The City of New York. New Bonds shall
be exchangeable for other bonds of the same series, in the manner and upon the
conditions prescribed in the Indenture, upon the surrender of such new Bonds at
said principal corporate trust office of the Trustee. However, notwithstanding
the provisions of Section 2.05 of the Indenture, no charge shall be made upon
any transfer or exchange
-9-
<PAGE>
of new Bonds other than for any tax or taxes or other governmental charge
required to be paid by the Company.
Any or all of the new Bonds shall be redeemable at any time and from
time to time, prior to maturity, upon notice given by mailing the same, by first
class mail postage prepaid, not less than thirty nor more than forty-five days
prior to the date fixed for redemption to each registered holder of a bond to be
redeemed (in whole or in part) at the last address of such holder appearing on
the registry books, at the principal amount thereof and accrued interest
thereon, if any, to the date fixed for redemption, if redeemed by the operation
of Section 4 of the Supplemental Indenture dated as of November 1, 1962 or of
the improvement fund provisions of any supplemental indenture or by the use of
proceeds of released property.
SECTION 2. The obligation of the Company to make payments with respect
to the principal of and premium, if any, and interest on the new Bonds shall be
fully or partially, as the case may be, satisfied and discharged, to the extent
that, at the time that any such payment shall be due, the Company shall have
made payments as required by the Company's Note dated November 8, 1995 issued
pursuant to Section 3.2 of the Loan Agreement dated as of October 15, 1995
between the Development Authority of Burke County and the Company, relating to
the Burke Bonds (hereinafter defined), sufficient to pay fully or partially the
then due principal of and premium, if any, and interest on the Development
Authority of Burke County (Georgia) Pollution Control Revenue Bonds (Georgia
Power Company Plant Vogtle Project), Sixth Series 1995 (hereinafter referred to
as the "Burke Bonds") or there shall be in the related Bond Fund established
pursuant to the Trust Indenture dated as of October 15, 1995 of the Development
Authority of Burke County to Bank South, Atlanta, Georgia, as trustee, relating
to the Burke Bonds (hereinafter referred to as the "Burke Indenture"),
sufficient available funds to pay fully or partially the then due principal of
and premium, if any, and interest on the Burke Bonds. The Trustee may
conclusively presume that the obligation of the Company to make payments with
respect to the principal of and premium, if any, and interest on the new Bonds
shall have been fully satisfied and discharged unless and until the Trustee
shall have received a written notice from the trustee under the Burke Indenture
stating (i) that timely payment of principal of or premium, if any, or interest
on the Burke Bonds has not been made, (ii) that there are not sufficient
available funds in such Bond Fund to make such payment and (iii) the amount of
funds required to make such payment.
In addition to the redemption as provided in Section 1 hereof, the new
Bonds shall also be redeemable in whole upon receipt by the Trustee of a written
demand for the redemption of the new Bonds (hereinafter called "Redemption
Demand") from the
-10-
<PAGE>
trustee under the Burke Indenture stating that the principal amount of all the
Burke Bonds then outstanding under the Burke Indenture has been declared
immediately due and payable pursuant to the provisions of Section 8.02 of the
Burke Indenture, specifying the date from which unpaid interest on the Burke
Bonds has then accrued and stating that such declaration of maturity has not
been rescinded. The Trustee shall within 10 days of receiving the Redemption
Demand mail a copy thereof to the Company stamped or otherwise marked to
indicate the date of receipt by the Trustee. The Company shall fix a redemption
date for the redemption so demanded (herein called the "Demand Redemption") and
shall mail to the Trustee notice of such date at least 30 days prior thereto.
The date fixed for Demand Redemption may be any day not more than 180 days after
receipt by the Trustee of the Redemption Demand. If the Trustee does not receive
such notice from the Company within 150 days after receipt by the Trustee of the
Redemption Demand, the date for Demand Redemption shall be deemed fixed at the
180th day after such receipt. The Trustee shall mail notice of the date fixed
for Demand Redemption (hereinafter called the "Demand Redemption Notice") to the
trustee under the Burke Indenture (and the registered holders of the new Bonds
if other than said trustee) not more than 10 nor less than 5 days prior to the
date fixed for Demand Redemption, provided, however, that the Trustee shall mail
no Demand Redemption Notice (and no Demand Redemption shall be made) if prior to
the mailing of the Demand Redemption Notice the Trustee shall have received
written notice of rescission of the Redemption Demand from the trustee under the
Burke Indenture. Demand Redemption of the new Bonds shall be at the principal
amount thereof, plus accrued interest thereon to the date fixed for redemption,
and such amount shall become and be due and payable on the date fixed for Demand
Redemption as above provided. Anything in this paragraph contained to the
contrary notwithstanding, if, after mailing of the Demand Redemption Notice and
prior to the date fixed for Demand Redemption, the Trustee shall have been
advised in writing by the trustee under the Burke Indenture that the Redemption
Demand has been rescinded, the Demand Redemption Notice shall thereupon, without
further act of the Trustee or the Company, be rescinded and become null and void
for all purposes hereunder and no redemption of the new Bonds and no payments in
respect thereof as specified in the Demand Redemption Notice shall be effected
or required.
SECTION 3. The Company covenants that the provisions of Section 4 of
the Supplemental Indenture dated as of November 1, 1962, shall be in full force
and effect so long as any new Bonds shall be outstanding under the Indenture.
SECTION 4. As supplemented by this Supplemental Indenture,
the Indenture is in all respects ratified and confirmed, and the
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<PAGE>
Indenture and this Supplemental Indenture shall be read, taken and construed as
one and the same instrument.
SECTION 5. Nothing in this Supplemental Indenture contained shall, or
shall be construed to, confer upon any person other than a holder of bonds
issued under the Indenture, as supplemented and amended, the Company and the
Trustee any right or interest to avail himself of any benefit under any
provision of the Indenture or of this Supplemental Indenture.
SECTION 6. The Trustee assumes no responsibility for or in respect of
the validity or sufficiency of this Supplemental Indenture or the due execution
hereof by the Company or for or in respect of the recitals and statements
contained herein, all of which recitals and statements are made solely by the
Company.
SECTION 7. This Supplemental Indenture may be executed in several
counterparts and all such counterparts executed and delivered, each as an
original, shall constitute but one and the same instrument.
SECTION 8. Although this Supplemental Indenture, for convenience and
for the purposes of reference, is dated as of the day and year first above
written, the actual dates of execution by the Company and the Trustee are as
indicated by their respective acknowledgments hereto annexed.
-12-
<PAGE>
IN WITNESS WHEREOF, said Georgia Power Company has caused this
Supplemental Indenture to be executed in its corporate name by its President or
one of its Vice Presidents and its corporate seal to be hereunto affixed and to
be attested by its Secretary or one of its Assistant Secretaries, and said
Chemical Bank, to evidence its acceptance hereof, has caused this Supplemental
Indenture to be executed in its corporate name by one of its Vice Presidents,
Senior Trust Officers or Trust Officers and its corporate seal to be hereunto
affixed and to be attested by one of its Senior Trust Officers, Trust Officers,
Assistant Trust Officers or Assistant Secretaries, in several counterparts, all
as of the day and year first above written.
GEORGIA POWER COMPANY
By:
Vice President
Attest:
Assistant Corporate Secretary
Signed, sealed and delivered this 2nd day of November, 1995 by Georgia Power
Company in the County of Fulton, State of Georgia, in the presence of
Unofficial Witness
Notary Public, Henry County, Georgia
My Commission Expires April 20, 1999
(signatures continued on next page)
<PAGE>
CHEMICAL BANK
By:
Vice President
Attest:
Senior Trust Officer
Signed, sealed and delivered this 3rd day of November, 1995 by Chemical Bank in
the County of New York, State of New York, in the presence of
Unofficial Witness
ANNABELLE DELUCA
Notary Public, State of New York
No. 01 DE 5013759
Qualified in Kings County
Certificate filed in New York County
Commission Expires July 15, 1997
<PAGE>
STATE OF GEORGIA )
) SS.:
COUNTY OF FULTON )
On the 2nd day of November, 1995, personally appeared before me Angela
K. Page, a Notary Public in and for the State and County aforesaid, Kay R. Wann,
who made oath and said that she was present and saw the corporate seal of
Georgia Power Company affixed to the above written instrument, that she saw Judy
M. Anderson, Vice President, with Cherry C. Hudgins, Assistant Corporate
Secretary, known to her to be such officers of said corporation respectively,
attest the same, and that she, deponent, with Angela K. Page witnessed the
execution and delivery of the said instrument as the free act and deed of said
Georgia Power Company.
Subscribed and sworn to )
before me this 2nd day of )
November, 1995 )
Notary Public, Henry County, Georgia
My Commission Expires April 20, 1999
<PAGE>
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
On the 3rd day of November, 1995, personally appeared before me
Annabelle DeLuca, a Notary Public in and for the State and County aforesaid, B.
Kelly, who made oath and said that she was present and saw the corporate seal of
Chemical Bank affixed to the above written instrument, that she saw G.
McFarlane, Vice President, with R. Lorenzen, Senior Trust Officer, known to her
to be such officers of said corporation respectively, attest the same, and that
she, deponent, with Annabelle DeLuca, witnessed the execution and delivery of
the said instrument as the free act and deed of said Chemical Bank.
Subscribed and sworn to )
before me this 3rd day of )
November, 1995 )
ANNABELLE DELUCA
Notary Public, State of New York
No. 01 DE 5013759
Qualified in Kings County
Certificate filed in New York County
Commission Expires July 15, 1997
<PAGE>
STATE OF GEORGIA )
) SS.:
COUNTY OF FULTON )
On the 2nd day of November, in the year one thousand nine hundred and
ninety-five, before me personally came Judy M. Anderson, to me known, who, being
by me duly sworn, did depose and say that she resides at 3435 Kingsboro Road,
Atlanta, Georgia; that she is a Vice President of Georgia Power Company, one of
the corporations described in and which executed the foregoing instrument; that
she knows the seal of said corporation; that the seal affixed to said instrument
is such corporate seal; that it was so affixed by order of the Board of
Directors of said corporation; and that she signed her name thereto by like
order.
Notary Public, Henry
County, Georgia
My Commission Expires
April 20, 1999
<PAGE>
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
On the 3rd day of November, in the year one thousand nine hundred and
ninety-five, before me personally came G. McFarlane, to me known, who, being by
me duly sworn, did depose and say that he resides at 1678 N. Gardiner Drive, Bay
Shore, New York; that he is a Vice President of Chemical Bank, one of the
corporations described in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by order of the Board of Directors
of said corporation; and that he signed his name thereto by like order.
ANNABELLE DELUCA
Notary Public, State of
New York
No. 01 DE 5013759
Qualified in Kings County
Certificate filed in New
York County
Commission Expires
July 15, 1997
<PAGE>
STATE OF GEORGIA )
) SS.:
COUNTY OF FULTON )
On the 2nd day of November, 1995, before me appeared Judy M. Anderson,
to me personally known, who, being by me duly sworn, did say that she is a Vice
President of Georgia Power Company, and that the seal affixed to said instrument
is the corporate seal of said corporation and that said instrument was signed
and sealed in behalf of said corporation by authority of its Board of Directors,
and that said Judy M. Anderson acknowledged said instrument to be the free act
and deed of said corporation.
Given under my hand this 2nd day of November, 1995.
Notary Public, Henry
County, Georgia
My Commission Expires
April 20, 1999
<PAGE>
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
On the 3rd day of November, 1995, before me appeared G. McFarlane, to
me personally known, who, being by me duly sworn, did say that he is a Vice
President of Chemical Bank, and that the seal affixed to said instrument is the
corporate seal of said corporation and that said instrument was signed and
sealed in behalf of said corporation by authority of its Board of Directors, and
that said G. McFarlane acknowledged said instrument to be the free act and deed
of said corporation.
Given under my hand this 3rd day of November, 1995.
ANNABELLE DELUCA
Notary Public, State of
New York
No. 01 DE 5013759
Qualified in Kings County
Certificate filed in New
York County
Commission Expires
July 15, 1997
Exhibit 10(a)61
AMENDMENT AND RESTATEMENT OF
THE SOUTHERN COMPANY
PRODUCTIVITY IMPROVEMENT PLAN
EFFECTIVE JANUARY 1, 1995
<PAGE>
THE SOUTHERN COMPANY
PRODUCTIVITY IMPROVEMENT PLAN
Amended and Restated
Effective January 1, 1995
ARTICLE DESCRIPTION PAGE
ARTICLE I Definitions......................................... 2
ARTICLE II Participants........................................ 4
ARTICLE III Corporate Financial Performance
Award............................................... 6
ARTICLE IV Miscellaneous Provisions............................ 7
<PAGE>
THE SOUTHERN COMPANY
PRODUCTIVITY IMPROVEMENT PLAN
Purposes
The purposes of The Southern Company Productivity Improvement Plan (the
"Plan") are to provide a financial incentive which will focus the efforts of
participants on areas that will have a direct and significant influence on
corporate performance and to provide the potential for levels of compensation
that will enhance the Employing Companies' abilities to attract, retain and
motivate key management employees. In order to achieve these objectives, the
Plan will be based upon corporate performance.
The amendment and restatement shall be effective as of January 1, 1995.
1
<PAGE>
ARTICLE I
1
Definitions
For purposes of the Plan, the following terms shall have the following
meanings unless a different meaning is plainly required by the context:
1.1 "Annual Salary" shall mean the wages paid to a Participant without
including overtime and before deduction of taxes, FICA, etc.
1.2 "Award" shall mean the award opportunity multiplied by the
performance unit value determined under Section 3.2 of the Plan.
1.3 "Award Opportunity" shall mean the target award opportunity
determined under Section 3.1 of the Plan.
1.4 "Award Percentage" shall mean the award percentage set forth on
Exhibit B hereto. Such Exhibit may be modified from time to time by the
Committee to reflect changes in Exhibit C hereto.
1.5 "Board of Directors" shall mean the Board of Directors of
Southern Company Services, Inc.
1.6 "Chief Executive Officer" shall mean the individual designated as
such by the Board of Directors of an Employing Company and of The Southern
Company.
1.7 "Committee" shall mean the individuals then serving in the
positions of Director, System Compensation and Benefits of The Southern Company;
Vice President, Human Resources of The Southern Company; and Comptroller of The
Southern Company or any other position or positions that succeed to the duties
of the foregoing positions.
1.8 "Common Stock" shall mean the common stock of The
Southern Company.
1.9 "Computation Period" shall mean a four-year period commencing on
the first day of the initial year of participation and thereafter it shall mean
a four-year period commencing the first day of January each year.
1.10 "Employee" shall mean any person who is currently employed by an
Employing Company but shall not include any individual who is eligible to
participate in The Southern Company Executive Productivity Improvement Plan or
any person who is eligible to participate in any incentive compensation program
maintained by an Employing Company that specifically provides that
2
<PAGE>
an eligible employee under such program shall not be entitled to also receive
Awards under this Plan.
1.11 "Employing Company" shall mean Southern Company Services, Inc., or
any affiliate or subsidiary (direct or indirect) of The Southern Company, which
the Board of Directors may from time to time determine to bring under the Plan
and which shall adopt the Plan, and any successor of any of them.
1.12 "Grade Level" shall mean the evaluation assigned under the job
evaluation system as of January 1 of each calendar year.
1.13 "Grade Level Value" shall mean the assigned dollar value within
the Annual Salary range for a Grade Level in a Computation Period, upon which
awards are based.
1.14 "Non-Adopting Company" shall mean any subsidiary or affiliate of
The Southern Company which is not an Employing Company.
1.15 "Participant" shall mean all Employees described in
Section 2.1 hereof.
1.16 "Payment Date" shall mean the date the check evidencing the Award
is endorsed by an authorized person of an Employing Company.
1.17 "Peer Group Companies" shall mean the Companies set forth on
Exhibit C attached hereto and as may be reviewed from time to time by the
Committee. Such Exhibit may be revised from time to time by the Committee to
reflect mergers, acquisitions, reorganizations, etc. of peer group members.
1.18 "Plan" shall mean The Southern Company Productivity Improvement
Plan, as described herein or as from time to time amended.
1.19 "Prior Plan" shall mean the Plan as amended and restated
effective January 1, 1994.
Where the context requires, words in the masculine gender shall include
the feminine and neuter genders, words in the singular shall include the plural,
and words in the plural shall include the singular.
3
<PAGE>
ARTICLE II
2
Participants
2.1 The Participants in the Plan shall be limited to those Employees of
an Employing Company who occupy Grade Level 7 and higher (prior to Grade Level
consolidation those Employees Grade Level 13 and above) as of January 1 of any
Computation Period, as well as any other Employee who occupies a grade
recommended for inclusion in the Plan by the Chief Executive Officer of an
Employing Company with the concurrence of the Chief Executive Officer of The
Southern Company, on January 1 of each calendar year; provided, however, that
any additional Employees who are recommended for inclusion in the Plan by the
Chief Executive Officer of an Employing Company with the concurrence of the
Chief Executive Officer of The Southern Company shall be identified by Grade
Level Value and/or title in an exhibit to the Plan each January 1.
2.2 Any Participant who vacates an eligible Grade Level prior to the
close of a Computation Period and who is not immediately reemployed with a
subsidiary or an affiliate of The Southern Company in an eligible Grade Level
shall forfeit any Award for any Computation Periods that have not closed as of
the date the Participant vacates such eligible Grade Level.
2.3 If a Participant terminates his employment for reason of death,
disability or retirement, such Participant shall be eligible to receive an Award
for the Computation Period ending in the year of such death, disability or
retirement. Any Participant who terminates employment for any other reason shall
receive only any unpaid Award for a completed Computation Period and shall not
be eligible to receive an Award for the Computation Period ending in the year of
such termination of employment.
2.4 Notwithstanding any other provision of this Plan, no employee whose
employment is terminated for cause, as that term is defined by the Committee,
shall be eligible to receive an Award for any completed or uncompleted
Computation Period.
2.5 The administration of Awards for Participants who are promoted or
transferred from one Grade Level included in the Plan to another Grade Level
included in the Plan shall be based on the Participant's Grade Level Value on
the first day of the Computation Period for which an Award is being granted.
2.6 Any individual who initially becomes a Participant in the Plan as
of January 1, 1995 shall be considered to have been participating in the Plan as
of January 1, 1993 for purposes of determining benefits payable for any
Computation Period that began or begins on or after January 1, 1993 and such
Participant will therefore be eligible for an Award equal to seventy-five
4
<PAGE>
percent (75%) of the Award Opportunity for the Computation Period
ending December 31, 1995.
2.7 In the case of an individual who becomes a Participant subsequent
to January 1, 1995, said Participant will participate in each Computation Period
which ends not less than two (2) years after becoming a Participant. A new
four-year measuring period begins each year in order to recognize the need to
link objectives over longer periods of time, to recognize changes in the
operating environment, and to encourage Participants to make long-term
decisions.
2.8 In the case of an individual transferring from an Employing Company
to a Non-Adopting Employer, the following will apply:
(a) any Award due to be paid but not yet paid the Participant
during the calendar year of the transfer if the Participant
had not transferred, shall be paid to the Participant by the
Employing Company from which the Participant is transferring;
and
(b) the transferring Participant shall also be entitled to a
prorated Award for the Computation Period ending in the
year of the transfer. Such Award shall be paid in the
year following the year of transfer. Such proration
shall be made on an one-forty-eighth basis for each month
in which the transferring employee works in an eligible
Grade Level for an Employing Company during the
Computation Period that ends on the December 31st of the
year of such transfer.
Any Awards payable under this Section 2.8 shall be based on the Grade Level at
the time of transfer.
2.9 In the case of an individual transferring from a Non- Adopting
Employer to an Employing Company whose Grade Level and length of service at the
Non-Adopting Employer would have caused the Employee to have been a Participant
in the Plan if the Non- Adopting Employer were an Employing Company and whose
Grade Level after the transfer would enable the Employee to participate in the
Plan, such individual shall be deemed to have been employed by an Employing
Company while employed with the Non-Adopting Employer and shall, for any
Computation Period ending after such transfer, be deemed a Participant in the
plan as if the Non-Adopting Employer was an Employing Company.
Any Awards payable under this Section 2.8 shall be based on the Grade Levels at
the Employing Company.
5
<PAGE>
ARTICLE III
3
Corporate Financial Performance Award
3.1 The Award Opportunity for each Participant shall be based upon his
Grade Level(s) and shall range from sixty-five percent (65%) to ten percent
(10%) of the Grade Level Value held by the Participant at the beginning of any
Computation Period. The Award Opportunity for each Grade Level held by a
Participant shall be determined in accordance with the chart set forth in
Exhibit A herein. Such Exhibit A shall be modified from time to time by the
Committee to reflect any changes in Exhibit C hereto.
3.2 Each Award Opportunity shall be multiplied by the Award Percentage
set forth in Exhibit B herein, which is based on The Southern Company's average
return on common equity ranking during a Computation Period as compared to the
average return on common equity ranking of the Peer Group Companies to determine
a Participant's Award. The return on common equity of the Peer Group Companies
shall be determined annually by an independent certified public accountant based
on generally accepted accounting principles and shall be properly adjusted and
annualized by such accountant so that each Peer Group Company return on common
equity may be accurately compared to that of The Southern Company.
3.3 Notwithstanding the above provisions, an Award will not be granted
for any Computation Period ending with the calendar year in which the current
earnings of The Southern Company are less than the amount necessary to fund the
dividends on its Common Stock at the rate such dividends were paid for the
immediately preceding calendar year.
3.4 In the discretion of the Committee of the Board of Directors, the
Award for one or more Computation Period(s) may be calculated without regard to
any extraordinary item of income or expense incurred by The Southern Company or
any Employing Company, provided such determination is made prior to the close of
the Computation Period.
3.5 The Awards to the Participants will be paid in cash as soon as is
practicable after all evaluations are completed. An Award payment may not be
deferred under this Plan. In the event an Award was deferred under the Prior
Plan, such deferral shall be governed by the terms of the Prior Plan.
6
<PAGE>
ARTICLE IV
4
Miscellaneous Provisions
4.1 Neither the Participant, his beneficiary, nor his personal
representative shall have any rights to commute, sell, assign, transfer or
otherwise convey the right to receive any payments hereunder, which payments and
the rights thereto are expressly declared to be nonassignable and
nontransferable. Any attempt to assign or transfer the right to payments of this
Plan shall be void and have no effect.
4.2 The Employing Company shall not reserve or otherwise set aside
funds for the payments of Awards deferred in accordance with the Prior Plan.
4.3 The Plan may be amended, modified, or terminated by the Board of
Directors in its sole discretion at any time and from time to time; provided,
however, that no such amendment, modification, or termination shall impair any
rights to payments which have been deferred under the Prior Plan prior to such
amendment, modification, or termination.
4.4 It is expressly understood and agreed that the Awards made in
accordance with the Plan are in addition to any other benefits or compensation
to which a Participant may be entitled or for which he may be eligible, whether
funded or unfunded, by reason of his employment with the Employing Company.
4.5 There shall be deducted from the payment of each Award under the
Plan the amount of any tax required by any governmental authority to be withheld
and paid over by the Employing Company to such governmental authority for the
account of the person entitled to such distribution.
4.6 Any Awards paid to a Participant while employed by an Employing
Company shall not be considered in the calculation of the Participant's benefits
under any other employee welfare or pension benefit plan maintained by an
Employing Company, unless otherwise specifically provided therein.
4.7 The Committee shall have the authority to interpret the provisions
of this Plan and to develop such rules and regulations as are necessary to carry
out the terms of the Plan. Any such interpretations, rules or regulations shall
be binding upon all Participants.
4.8 The Committee shall have the authority to delegate any of its
duties and obligations hereunder and shall have the authority to engage such
agents as it deems necessary to carry out its duties and obligations hereunder.
7
<PAGE>
4.9 This Plan, and all its rights under it, shall be governed by and
construed in accordance with the laws of the State of Georgia.
IN WITNESS WHEREOF, Southern Company Services, Inc., through its duly
authorized officers, hereby amends and restates The Southern Company
Productivity Improvement Plan this ____ day of ____________________, 1995, to be
effective January 1, 1995.
SOUTHERN COMPANY SERVICES, INC.
By:
----------------------------------
Its:
----------------------------------
Attest:
By:
---------------------------------------------------------
Its:
-------------------------------------------------------
[CORPORATE SEAL]
8
<PAGE>
EXPLANATORY NOTES
Under Section 3.2 the average ROCE for a Computation Period will be determined
by a) calculating the average ROCE for each year in the Computation Period, b)
adding the average ROCE calculations for all years in the Computation Period;
and c) dividing the total by the number of years in the Computation Period.
<PAGE>
THE SOUTHERN COMPANY
PRODUCTIVITY IMPROVEMENT PLAN
EXHIBIT A
Grade Target Award Opportunity
1/1/95 4/1/95
President/CEO 65%
President/CEO 50%
29/30 (15) 50%
27/28 (14) 45%
25/26 (13) 40%
25/24 (12) 35%
21/22 (11) 30%
19/20 (10) 25%
17/18 (9) 20%
15/16 (8) 15%
13/14 (7) 10%
<PAGE>
THE SOUTHERN COMPANY
PRODUCTIVITY IMPROVEMENT PLAN
EXHIBIT B
AWARD PERCENTAGE SCHEDULE
Position Ranking
------------------------------------------------------
Value of
Performance Unit 12-14 15-17 18-20
$ Companies Companies Companies
- --------- --------- ---------
Above Above Above
$2.00 Position 1 Position 1 Position 1
1.80 1.0 1.0 1.0
1.60 2.0 2.0 2.0
1.40 2.5 3.0 3.0
1.20 3.0 4.0 4.0
1.00 4.0 4.5 5.0
0.90 4.5 5.0 6.0
0.80 5.0 6.0 7.0
0.70 6.0 7.0 8.0
0.60 6.5 8.0 9.0
0.50 7.0 8.5 10.0
0 Below 7.0 Below 8.5 Below 10
<PAGE>
THE SOUTHERN COMPANY
PRODUCTIVITY IMPROVEMENT PLAN
EXHIBIT C
The Peer Group Companies are as follows:
TECO Energy, Inc.
Carolina Power & Light Company
SCANA
Central Louisiana Electric Company, Inc.
Duke Power Company
Potomac Electric Power Company
American Electric Power Company, Inc.
Dominion Resources, Inc.
Allegheny Power Systems, Inc.
Florida Progress
Delmarva Power & Light Company
Baltimore Gas and Electric Company
Entergy, Inc.
FPL Group
Kentucky Utilities Energy Corporation
Central and South West Corporation
The Southern Company
Exhibit 10(a)62
AMENDMENT AND RESTATEMENT OF
THE SOUTHERN COMPANY
EXECUTIVE PRODUCTIVITY IMPROVEMENT PLAN
EFFECTIVE JANUARY 1, 1995
<PAGE>
THE SOUTHERN COMPANY
EXECUTIVE PRODUCTIVITY IMPROVEMENT PLAN
Amended and Restated
Effective January 1, 1995
ARTICLE DESCRIPTION PAGE
ARTICLE I Definitions............................................ 2
ARTICLE II Participants........................................... 4
ARTICLE III Corporate Financial Performance Award.................. 6
ARTICLE IV Miscellaneous Provisions............................... 7
<PAGE>
THE SOUTHERN COMPANY
EXECUTIVE PRODUCTIVITY IMPROVEMENT PLAN
Purposes
The purposes of The Southern Company Executive Productivity Improvement
Plan (the "Plan") are to provide a financial incentive which will focus the
efforts of certain executives on areas that will have a direct and significant
influence on corporate performance and to provide the potential for levels of
compensation that will enhance the Employing Companies' abilities to attract,
retain and motivate such executives. In order to achieve these objectives, the
Plan will be based upon corporate performance.
The amendment and restatement shall be effective as of January 1, 1995.
<PAGE>
ARTICLE I
Definitions
For purposes of the Plan, the following terms shall have the following
meanings unless a different meaning is plainly required by the context:
1.1 "Annual Salary" shall mean the wages paid to a Participant without
including overtime and before deduction of taxes, FICA, etc.
1.2 "Award" shall mean the award opportunity multiplied by the
performance unit value determined under Section 3.2 of the Plan.
1.3 "Award Opportunity" shall mean the target award opportunity
determined under Section 3.1 of the Plan.
1.4 "Board of Directors" shall mean the Board of Directors of
Southern Company Services, Inc.
1.5 "Chief Executive Officer" shall mean the individual designated as
such by the Board of Directors of an Employing Company and of The Southern
Company.
1.6 "Committee" or "Compensation Committee" shall mean the
Compensation Committee of the Board of Directors of The Southern
Company or the Employing Company.
1.7 "Common Stock" shall mean the common stock of The
Southern Company.
1.8 "Computation Period" shall mean a four-year period commencing on
the first day of the initial year of participation and thereafter it shall mean
a four-year period commencing the first day of January each year.
1.9 "Employing Company" shall mean Southern Company Services, Inc., or
any affiliate or subsidiary (direct or indirect) of The Southern Company, which
the Board of Directors may from time to time determine to bring under the Plan
and which shall adopt the Plan, and any successor of any of them.
1.10 "Executive Employee" shall mean any person who is currently
employed by an Employing Company who is an "officer" as that term is defined in
Regulation 16a-1 promulgated by the Securities Exchange Commission pursuant to
the Securities Exchange Act of 1934, as amended, excluding however any principal
financial officer, principal accounting officer or controller unless the person
holding such position otherwise meets the definition of "officer" set forth in
such Regulation.
- 2 -
<PAGE>
1.11 "Grade Level" shall mean the evaluation assigned under
the job evaluation system.
1.12 "Grade Level Value" shall mean the assigned dollar value within
the Annual Salary range for a Grade Level in a Computation Period, upon which
awards are based.
1.13 "Participant" shall mean an Executive Employee who
satisfies the criteria referred to in Article II at the beginning
of a Computation Period.
1.14 "Payment Date" shall mean the date the check evidencing the Award
is endorsed by an authorized person of an Employing Company.
1.15 "Peer Group Companies" shall mean the Companies set forth on
Exhibit C attached hereto. Such Exhibit may be revised from time to time by the
Committee to reflect mergers, acquisitions, reorganizations, etc. of peer group
members.
1.16 "Plan" shall mean The Southern Company Executive Productivity
Improvement Plan, as described herein or as from time to time amended.
1.17 "Prior Plan" shall mean the Plan as amended and restated
effective January 1, 1994.
Where the context requires, words in the masculine gender shall include
the feminine and neuter genders, words in the singular shall include the plural,
and words in the plural shall include the singular.
- 3 -
<PAGE>
ARTICLE II
Participants
2.1 Participation in the Plan shall be limited to Executive
Employees of the Employing Companies.
2.2 Any Participant who vacates an eligible Grade Level prior to the
close of a Computation Period and who is not immediately reemployed with an
affiliate of an Employing Company shall forfeit any Award for any Computation
Periods that have not closed as of the date the Participant vacates such
eligible Grade Level.
2.3 Any Participant who terminates his employment with the Company and
who is not immediately reemployed with an affiliate of an Employing Company
prior to the Payment Date of any Award due under this Plan for reasons other
than death, disability, or retirement shall forfeit any Award due under this
Plan. If a Participant terminates his employment for reason of death, disability
or retirement, such Participant shall be eligible to receive an Award for the
Computation Period ending in the year of such death, disability or retirement.
2.4 Notwithstanding any other provision of this Plan, no employee whose
employment is terminated for cause, as that term is defined by the Committee,
shall be eligible to receive an Award under this Plan.
2.5 The administration of Awards for Participants who are promoted or
transferred from one Grade Level included in the Plan to another Grade Level
included in the Plan shall be based on the Participant's Grade Level Value on
the first day of the Computation Period for which an Award is being granted. For
the Computation Periods ending December 31, 1995, December 31, 1996, December
31, 1997 and December 31, 1998 a Participant's Grade Level Value for determining
Awards shall be the Participant's Grade Level Value on January 1, 1995.
2.6 Notwithstanding any other provision of this Plan, the maximum Award
for any Computation Period payable to any Participant shall be one million five
hundred thousand dollars ($1,500,000).
2.7 Any individual who initially becomes a Participant in the Plan as
of January 1, 1995 shall be considered to have been participating in the Plan as
of January 1, 1993 for purposes of determining benefits payable for any
Computation Period that began or begins on or after January 1, 1993 and such
Participant will therefore be eligible for an Award equal to seventy-five
percent (75%) of the Award Opportunity for the Computation Period ending
December 31, 1995.
- 4 -
<PAGE>
2.8 In the case of an individual who becomes a Participant subsequent
to January 1, 1995, said Participant will participate in each Computation Period
which ends not less than two (2) years after becoming a Participant. A new
four-year measuring period begins each year in order to recognize the need to
link objectives over longer periods of time, to recognize changes in the
operating environment, and to encourage Participants to make long-term
decisions.
- 5 -
<PAGE>
ARTICLE III
Corporate Financial Performance Award
3.1 The Award Opportunity for each Participant shall be based upon his
Grade Level(s) and shall range from sixty-five percent (65%) to ten percent
(10%) of the Grade Level Value held by the Participant at the beginning of any
Computation Period. The Award Opportunity for each Grade Level held by a
Participant shall be determined in accordance with the chart set forth in
Exhibit A herein.
3.2 Each Award Opportunity shall be multiplied by the value of the
performance unit factor set forth in Exhibit B herein, which is based on The
Southern Company's average return on common equity ranking during a Computation
Period as compared to the average return on common equity ranking of the Peer
Group Companies to determine a Participant's Award. The return on common equity
of the Peer Group Companies shall be determined annually by an independent
certified public accountant based on generally accepted accounting principles
and shall be properly adjusted and annualized by such accountant so that each
Peer Group Company return on common equity may be accurately compared to that of
The Southern Company.
3.3 Notwithstanding the above provisions, an Award will not be granted
for any Computation Period ending with the calendar year in which the current
earnings of The Southern Company are less than the amount necessary to fund the
dividends on its Common Stock at the rate such dividends were paid for the
immediately preceding calendar year.
3.4 In the discretion of the Compensation Committee of the Board of
Directors, the Award for one or more Computation Period(s) may be calculated
without regard to any extraordinary item of income incurred by The Southern
Company or any Employing Company, provided such determination is made prior to
the close of the Computation Period.
3.5 The Awards to the Participants will be paid in cash as soon as is
practicable after all evaluations are completed. An Award payment may not be
deferred under this Plan. In the event an Award was deferred under the Prior
Plan, such deferral shall be governed by the terms of the Prior Plan.
- 6 -
<PAGE>
ARTICLE IV
Miscellaneous Provisions
4.1 Neither the Participant, his beneficiary, nor his personal
representative shall have any rights to commute, sell, assign, transfer or
otherwise convey the right to receive any payments hereunder, which payments and
the rights thereto are expressly declared to be nonassignable and
nontransferable. Any attempt to assign or transfer the right to payments of this
Plan shall be void and have no effect.
4.2 The Employing Company shall not reserve or otherwise set aside
funds for the payments of Awards deferred in accordance with the Prior Plan.
4.3 The Plan may be amended, modified, or terminated by the Board of
Directors in its sole discretion at any time and from time to time; provided,
however, that no such amendment, modification, or termination shall impair any
rights to payments which have been deferred under the Prior Plan prior to such
amendment, modification, or termination.
4.4 It is expressly understood and agreed that the Awards made in
accordance with the Plan are in addition to any other benefits or compensation
to which a Participant may be entitled or for which he may be eligible, whether
funded or unfunded, by reason of his employment with the Employing Company.
4.5 There shall be deducted from the payment of each Award under the
Plan the amount of any tax required by any governmental authority to be withheld
and paid over by the Employing Company to such governmental authority for the
account of the person entitled to such distribution.
4.6 Any Awards paid to a Participant while employed by an Employing
Company shall not be considered in the calculation of the Participant's benefits
under any other employee welfare or pension benefit plan maintained by an
Employing Company, unless otherwise specifically provided therein.
4.7 This Plan, and all its rights under it, shall be governed by and
construed in accordance with the laws of the State of Georgia.
- 7 -
<PAGE>
IN WITNESS WHEREOF, Southern Company Services, Inc., through its duly
authorized officers, hereby amends and restates The Southern Company Executive
Productivity Improvement Plan this ____ day of ____________________, 1995, to be
effective January 1, 1995.
SOUTHERN COMPANY SERVICES, INC.
By:
----------------------------------------------------
Its:
----------------------------------------------------
Attest:
By:
---------------------------------------------------------
Its:
-------------------------------------------------------
[CORPORATE SEAL]
- 8 -
<PAGE>
EXPLANATORY NOTES
Under Section 3.2 the average ROCE for a Computation Period will be determined
by a) calculating the average ROCE for each year in the Computation Period, b)
adding the average ROCE calculations for all years in the Computation Period;
and c) dividing the total by the number of years in the Computation Period.
<PAGE>
THE SOUTHERN COMPANY
EXECUTIVE PRODUCTIVITY IMPROVEMENT PLAN
EXHIBIT A
Grade Target Award Opportunity
1/1/95 4/1/95
President/CEO 65%
President/CEO 50%
29/30 (15) 50%
27/28 (14) 45%
25/26 (13) 40%
25/24 (12) 35%
21/22 (11) 30%
19/20 (10) 25%
17/18 (9) 20%
15/16 (8) 15%
13/14 (7) 10%
<PAGE>
THE SOUTHERN COMPANY
EXECUTIVE PRODUCTIVITY IMPROVEMENT PLAN
EXHIBIT B
AWARD PERCENTAGE SCHEDULE
alue of Performance Ranking Against
Unit ($) Comparison Group
$2.00 Above position 1
$1.80 1
$1.60 2
$1.40 3
$1.20 4
$1.00 4.5
$0.90 5
$0.80 6
$0.70 7
$0.60 8
$0.50 8.5
$0.00 Below 8.5
<PAGE>
THE SOUTHERN COMPANY
EXECUTIVE PRODUCTIVITY IMPROVEMENT PLAN
EXHIBIT C
The Peer Group Companies are as follows:
TECO Energy, Inc.
Carolina Power & Light Company
SCANA
Central Louisiana Electric Company, Inc.
Duke Power Company
Potomac Electric Power Company
American Electric Power Company, Inc.
Dominion Resources, Inc.
Allegheny Power Systems, Inc.
Florida Progress
Delmarva Power & Light Company
Baltimore Gas and Electric Company
Entergy, Inc.
FPL Group
Kentucky Utilities Energy Corporation
Central and South West Corporation
The Southern Company
<PAGE>
Exhibit 10(a)63
THE SOUTHERN COMPANY
EMPLOYEE SAVINGS PLAN
As Amended and Restated
Effective July 3, 1995
<PAGE>
TABLE OF CONTENTS
ARTICLE I PURPOSE...................................................... 1
ARTICLE II DEFINITIONS.................................................. 2
2.1 "Account"............................................................ 2
2.2 "Actual Contribution Percentage Test"................................ 2
2.3 "Actual Deferral Percentage"......................................... 2
2.4 "Actual Deferral Percentage Test".................................... 2
2.5 "Affiliated Employer"................................................ 2
2.6 "Aggregate Account".................................................. 3
2.7 "Aggregation Group" ................................................. 3
(a) "Required Aggregation Group".........................3
(b) "Permissive Aggregation Group".......................4
2.8 "Annual Addition".................................................... 4
2.9 "Average Actual Deferral Percentage"................................. 4
2.10 "Average Contribution Percentage".................................... 4
2.11 "Beneficiary"........................................................ 4
2.12 "Board of Directors"................................................. 4
2.13 "Break-in-Service Date" ............................................. 4
2.14 "Code"............................................................... 5
2.15 "Committee" ......................................................... 5
2.16 "Common Stock"....................................................... 5
2.17 "Company"............................................................ 5
2.18 "Compensation"....................................................... 5
2.19 "Contribution Percentage" ........................................... 6
2.20 "Defined Benefit Plan Fraction" ..................................... 6
2.21 "Defined Contribution Plan Fraction" ................................ 6
2.22 "Determination Date" ................................................ 7
2.23 "Determination Year" ................................................ 7
2.24 "Distributee" ....................................................... 7
2.25 "Direct Rollover" ................................................... 7
2.26 "Elective Employer Contribution"..................................... 7
2.27 "Eligible Employee" ................................................. 7
2.28 "Eligible Participant" .............................................. 8
2.29 "Eligible Retirement Plan" .......................................... 8
2.30 "Eligible Rollover Distribution" .................................... 8
2.31 "Employee"........................................................... 8
2.32 "Employer Matching Contribution"..................................... 8
2.33 "Employing Company".................................................. 8
2.34 "Enrollment Date".................................................... 9
2.35 "ERISA".............................................................. 9
2.36 "Excess Aggregate Contributions"..................................... 9
2.37 "Excess Deferral Amount" ............................................ 9
2.38 "Excess Deferral Contributions"...................................... 9
2.39 "Family Member" ..................................................... 9
2.40 "Highly Compensated Employee"........................................ 9
2.41 "Hour of Service".................................................... 10
2.42 "Investment Fund".................................................... 10
2.43 "Key Employee" ...................................................... 10
i
<PAGE>
2.44 "Limitation Year" .................................................. 10
2.45 "Look-Back Year" ................................................... 10
2.46 "Non-Highly Compensated Employee"................................... 10
2.47 "Normal Retirement Date"............................................ 11
2.48 "One-Year Break in Service"......................................... 11
2.49 "Participant"....................................................... 11
2.50 "Plan".............................................................. 11
2.51 "Plan Year"......................................................... 11
2.52 "Present Value of Accrued Retirement Income" ....................... 11
2.53 "SEPCO" ............................................................ 11
2.54 "SEPCO Plan" ....................................................... 11
2.55 "SEPCO Transferred Account" ........................................ 11
2.56 "Super-Top-Heavy Group" ............................................ 11
2.57 "Surviving Spouse" ................................................. 11
2.58 "Top-Heavy Group" .................................................. 11
2.59 "Trust" or "Trust Fund"............................................. 12
2.60 "Trust Agreement"................................................... 12
2.61 "Trustee"........................................................... 12
2.62 "Valuation Date".................................................... 12
2.63 "Voluntary Participant Contribution"................................ 12
2.64 "Year of Service"................................................... 12
ARTICLE III PARTICIPATION.............................................. 14
3.1 Eligibility Requirements............................................. 14
3.2 Participation upon Reemployment...................................... 14
3.3 No Restoration of Previously Distributed Benefits.................... 14
3.4 Loss of Eligible Employee Status..................................... 15
3.5 Special Rule for Scott Paper Company Energy Complex
Employees............................................................ 15
ARTICLE IV ELECTIVE EMPLOYER CONTRIBUTIONS AND VOLUNTARY
PARTICIPANT CONTRIBUTIONS.................................. 16
4.1 Elective Employer Contributions...................................... 16
4.2 Maximum Amount of Elective Employer Contributions.................... 16
4.3 Distribution of Excess Deferral Amounts.............................. 16
4.4 Additional Rules Regarding Elective Employer
Contributions........................................................ 17
4.5 Section 401(k) Nondiscrimination Tests............................... 19
4.6 Voluntary Participant Contributions.................................. 23
4.7 Manner and Time of Payment of Elective Employer
Contributions and Voluntary Participant Contributions................ 23
4.8 Change in Contribution Rate.......................................... 23
4.9 Change in Contribution Amount........................................ 23
4.10 Rollover Contributions and Direct Transfers from Other
Qualified Retirement Plans........................................... 24
ARTICLE V EMPLOYER MATCHING CONTRIBUTIONS.............................. 25
5.1 Amount of Employer Matching Contributions............................ 25
5.2 Investment of Employer Matching Contributions........................ 25
ii
<PAGE>
5.3 Payment of Employer Matching Contributions............................ 25
5.4 Limitations on Employer Matching Contributions and
Voluntary Participant Contributions................................... 25
5.5 Special Rules for Employer Matching Contributions and
Voluntary Participant Contributions................................... 26
5.6 Distribution of Excess Aggregate Contributions........................ 27
5.7 Reversion of Employing Company Contributions.......................... 28
5.8 Correction of Prior Incorrect Allocations and
Distributions......................................................... 29
ARTICLE VI LIMITATIONS ON CONTRIBUTIONS................................... 30
6.1 Section 415 Limitations............................................... 30
6.2 Correction of Contributions in Excess of Section 415
Limits................................................................ 31
6.3 Combination of Plans.................................................. 32
ARTICLE VII SUSPENSION OF CONTRIBUTIONS................................... 33
7.1 Suspension of Contributions........................................... 33
7.2 Resumption of Contributions........................................... 33
ARTICLE VIII INVESTMENT OF PARTICIPANTS' CONTRIBUTIONS................... 34
8.1 Investment Funds...................................................... 34
8.2 Investment of Participant Contributions............................... 34
8.3 Investment of Earnings................................................ 34
8.4 Transfer of Assets between Funds...................................... 34
8.5 Change in Investment Direction........................................ 34
8.6 Section 404(c) Plan................................................... 35
ARTICLE IX MAINTENANCE AND VALUATION OF PARTICIPANTS'
ACCOUNTS.................................................... 36
9.1 Establishment of Accounts............................................. 36
9.2 Valuation of Investment Funds......................................... 36
9.3 Rights in Investment Funds............................................ 36
ARTICLE X VESTING..................................................... 38
10.1 Vesting.............................................................. 38
ARTICLE XI WITHDRAWALS AND LOANS PRIOR TO TERMINATION OF
EMPLOYMENT................................................... 39
11.1 Withdrawals by Participants.......................................... 39
11.2 Notice of Withdrawal................................................. 40
11.3 Form of Withdrawal................................................... 40
11.4 Minimum Withdrawal................................................... 40
11.5 Source of Withdrawal................................................. 40
11.6 Requirement of Hardship.............................................. 40
11.7 Loans to Participants................................................ 42
iii
<PAGE>
ARTICLE XII DISTRIBUTION TO PARTICIPANTS................................ 45
12.1 Distribution upon Retirement....................................... 45
12.2 Distribution upon Disability....................................... 46
12.3 Distribution upon Death............................................ 46
12.4 Designation of Beneficiary in the Event of Death................... 46
12.5 Distribution upon Termination of Employment........................ 47
12.6 Commencement of Benefits........................................... 48
12.7 Transfer between Employing Companies............................... 48
12.8 Distributions to Alternate Payees.................................. 49
12.9 Requirement for Direct Rollovers................................... 49
12.10 Consent and Notice Requirements.................................... 49
12.11 Form of Payment.................................................... 50
ARTICLE XIII ADMINISTRATION OF THE PLAN................................. 51
13.1 Membership of Committee............................................ 51
13.2 Acceptance and Resignation......................................... 51
13.3 Transaction of Business............................................ 51
13.4 Responsibilities in General........................................ 51
13.5 Committee as Named Fiduciary....................................... 51
13.6 Rules for Plan Administration...................................... 52
13.7 Employment of Agents............................................... 52
13.8 Co-Fiduciaries..................................................... 52
13.9 General Records.................................................... 52
13.10 Liability of the Committee......................................... 53
13.11 Reimbursement of Expenses and Compensation of
Committee.......................................................... 53
13.12 Expenses of Plan and Trust Fund.................................... 53
13.13 Responsibility for Funding Policy.................................. 54
13.14 Management of Assets............................................... 54
13.15 Notice and Claims Procedures....................................... 54
13.16 Bonding............................................................ 54
13.17 Multiple Fiduciary Capacities...................................... 54
13.18 Change in Administrative Procedures................................ 55
ARTICLE XIV TRUSTEE OF THE PLAN......................................... 56
14.1 Trustee............................................................. 56
14.2 Purchase of Common Stock............................................ 56
14.3 Voting of Common Stock.............................................. 57
14.4 Voting of Other Investment Fund Shares.............................. 57
14.5 Uninvested Amounts.................................................. 57
14.6 Independent Accounting.............................................. 57
ARTICLE XV AMENDMENT AND TERMINATION OF THE PLAN........................ 58
15.1 Amendment of the Plan............................................... 58
15.2 Termination of the Plan............................................. 58
15.3 Merger or Consolidation of the Plan................................. 59
ARTICLE XVI TOP-HEAVY REQUIREMENTS....................................... 60
iv
<PAGE>
16.1 Top-Heavy Plan Requirements......................................... 60
16.2 Determination of Top-Heavy Status................................... 60
16.3 Minimum Allocation for Top-Heavy Plan Years......................... 61
16.4 Adjustments to Maximum Benefit Limits for Top-Heavy
Plans............................................................... 62
ARTICLE XVII GENERAL PROVISIONS.......................................... 63
17.1 Plan Not an Employment Contract..................................... 63
17.2 No Right of Assignment or Alienation................................ 63
17.3 Payment to Minors and Others........................................ 64
17.4 Source of Benefits.................................................. 64
17.5 Unclaimed Benefits.................................................. 64
17.6 Governing Law....................................................... 64
ARTICLE XVIII SPECIAL REQUIREMENTS FOR ACCOUNT BALANCES
ATTRIBUTABLE TO ACCRUED BENEFITS TRANSFERRED FROM
THE SEPCO PLAN ............................................ 65
18.1 SEPCO Transferred Accounts.......................................... 65
18.2 In-Service Withdrawals from SEPCO
Transferred Accounts................................................ 65
18.3 Loans from SEPCO Transferred Accounts............................... 65
18.4 Distribution of SEPCO Transferred Accounts.......................... 66
18.5 Code Section 411(d)(6) Protected Benefits........................... 68
v
<PAGE>
THE SOUTHERN COMPANY
EMPLOYEE SAVINGS PLAN
As Amended and Restated
Effective July 3, 1995
ARTICLE I
PURPOSE
The purpose of the Plan is to encourage employee thrift, to create
added employee interest in the affairs of The Southern Company, to provide a
means for becoming a shareholder in The Southern Company, to supplement
retirement and death benefits, and to create a competitive compensation program
for employees through the establishment of a formal plan under which
contributions by and on behalf of Participants are supplemented by contributions
of Employing Companies. This Plan is intended to be a stock bonus plan, and all
contributions made by an Employing Company to this Plan are expressly
conditioned upon the deductibility of such contributions under Code Section 404.
The Plan was originally effective March 1, 1976 and is being amended and
restated effective as of July 3, 1995, in order to incorporate a variety of plan
design and other changes. This amendment and restatement shall not be applicable
to former Participants or Beneficiaries of former Participants whose employment
with an Employing Company terminated prior to July 3, 1995.
<PAGE>
ARTICLE II
DEFINITIONS
All references to articles, sections, subsections, and paragraphs shall
be to articles, sections, subsections, and paragraphs of this Plan unless
another reference is expressly set forth in this Plan. Any words used in the
masculine shall be read and be construed in the feminine where they would so
apply. Words in the singular shall be read and construed in the plural, and all
words in the plural shall be read and construed in the singular in all cases
where they would so apply.
For purposes of this Plan, unless otherwise required by the context,
the following terms shall have the meanings set forth opposite such terms:
2.1 "Account" shall mean the total amount credited to the
account of a Participant, as described in Section 9.1.
2.2 "Actual Contribution Percentage Test" shall mean the
test described in Section 5.4(a).
2.3 "Actual Deferral Percentage" shall mean the ratio (expressed as a
percentage) of Elective Employer Contributions on behalf of an Eligible
Participant for the Plan Year to the Eligible Participant's compensation for the
Plan Year. For the purpose of determining an Eligible Participant's Actual
Deferral Percentage for a Plan Year, the Plan Committee may elect to consider an
Eligible Participant's compensation for (a) the entire Plan Year or (b) that
portion of the Plan Year in which the Eligible Participant was eligible to have
Elective Employer Contributions made on his behalf, provided that such election
is applied uniformly to all Eligible Participants for the Plan Year. The Actual
Deferral Percentage of an Eligible Participant who does not have Elective
Employer Contributions made on his behalf shall be zero.
2.4 "Actual Deferral Percentage Test" shall mean the test
described in Section 4.5(a).
2.5 "Affiliated Employer" shall mean an Employing Company and (a) any
corporation which is a member of a controlled group of corporations (as defined
in Section 414(b) of the Code) which includes such Employing Company, (b) any
trade or business (whether or not incorporated) which is under common control
(as defined in Section 414(c) of the Code) with such Employing Company, (c) any
organization (whether or not incorporated) which is a member of an affiliated
service group (as defined in Section 414(m) of the Code) which includes such
Employing Company, and (d) any other entity required to be aggregated with such
Employing Company pursuant to
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regulations under Section 414(o) of the Code. Notwithstanding the foregoing, for
purposes of applying the limitations of Article VI, the term Affiliated Employer
shall be adjusted as required by Code Section 415(h).
2.6 "Aggregate Account" shall mean with respect to a
Participant as of the Determination Date, the sum of the following:
(a) the Account balance of such Participant as of
the most recent valuation occurring within a twelve-
month period ending on the Determination Date;
(b) an adjustment for any contributions due as of
the Determination Date;
(c) any Plan distributions, including unrelated
rollovers and plan-to-plan transfers (ones which are both
initiated by the Employee and made from a plan maintained by
one employer to a plan maintained by another employer), but
not related rollovers or plan-to- plan transfers (ones
either not initiated by the Employee or made to a plan
maintained by the same employer), made within the Plan Year
that includes the Determination Date or within the four
preceding Plan Years, including distributions made prior to
January 1, 1984, and distributions made under a terminated
plan which if it had not been terminated would have been
required to be included in an Aggregation Group;
(d) any Employee contributions, whether voluntary
or mandatory;
(e) unrelated rollovers and plan-to-plan
transfers to this Plan accepted prior to January 1,
1984; and
(f) related rollovers and plan-to-plan transfers
to this Plan.
2.7 "Aggregation Group" shall mean either a Required Aggregation Group
or a Permissive Aggregation Group as hereinafter determined.
(a) Required Aggregation Group: In determining a
Required Aggregation Group hereunder, each plan of the
Affiliated Employers in which a Key Employee is a
participant and each other plan of the Affiliated Employers
which enables any plan in which a Key Employee participates
to meet requirements of Code Section 401(a)(4) or 410 will
be required to be aggregated.
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Such group shall be known as a Required Aggregation Group.
(b) Permissive Aggregation Group: The Affiliated
Employers may also include any other plan not required to be
included in the Required Aggregation Group, provided the
resulting group, taken as a whole, would continue to satisfy
the provisions of Code Section 401(a)(4) or 410. Such group
shall be known as a Permissive Aggregation Group.
2.8 "Annual Addition" shall mean the amount allocated to a
Participant's Account and accounts under all defined contribution plans
maintained by the Affiliated Employers during a Limitation Year that constitutes
(a) Affiliated Employer contributions,
(b) voluntary participant contributions,
(c) forfeitures, if any, allocated to a
Participant's Account or accounts under all defined
contribution plans maintained by the Affiliated
Employers, and
(d) amounts described in Sections 415(l)(1) and
419A(d)(2) of the Code.
2.9 "Average Actual Deferral Percentage" shall mean the average
(expressed as a percentage) of the Actual Deferral Percentages of the Eligible
Participants in a group.
2.10 "Average Contribution Percentage" shall mean the average
(expressed as a percentage) of the Contribution Percentages of the
Eligible Participants in a group.
2.11 "Beneficiary" shall mean any person(s) who, or estate(s),
trust(s), or organization(s) which, in accordance with the provisions of Section
12.4, become entitled to receive benefits upon the death of a Participant.
2.12 "Board of Directors" shall mean the Board of Directors
of Southern Company Services, Inc.
2.13 "Break-in-Service Date" means the earlier of:
(a) the date on which an Employee terminates employment, is
discharged, retires, or dies; or
(b) the last day of an approved leave of absence including
any extension.
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In the case of an individual who is absent from work for maternity or
paternity reasons, such individual shall not incur a Break-in-Service Date
earlier than the expiration of the second anniversary of the first date of such
absence; provided, however, that the twelve-consecutive-month period beginning
on the first anniversary of the first date of such absence shall not constitute
a Year of Service. For purposes of this paragraph, an absence from work for
maternity or paternity reasons means an absence (a) by reason of the pregnancy
of the Employee, (b) by reason of a birth of a child of the Employee, (c) by
reason of the placement of a child with the Employee in connection with the
adoption of such child by such Employee, or (d) for purposes of caring for such
child for a period beginning immediately following such birth or placement.
2.14 "Code" shall mean the Internal Revenue Code of 1986, as amended,
or any successor statute, and the rulings and regulations promulgated
thereunder. In the event an amendment to the Code renumbers a section of the
Code referred to in this Plan, any such reference automatically shall become a
reference to such section as renumbered.
2.15 "Committee" shall mean the committee appointed pursuant
to Section 13.1 to serve as plan administrator.
2.16 "Common Stock" shall mean the common stock of The
Southern Company.
2.17 "Company" shall mean Southern Company Services, Inc.,
and its successors.
2.18 "Compensation" shall mean the base salary or wages of a
Participant, including all amounts contributed by an Employing Company to The
Southern Company Flexible Benefits Plan on behalf of a Participant pursuant to a
salary reduction arrangement under such plan, monthly shift and monthly
seven-day schedule differentials, geographic premiums, monthly customer service
premiums, and monthly nuclear plant premiums, and before deduction of taxes,
social security, etc., but excluding all awards under The Southern Company
Performance Pay Plan, The Southern Company Productivity Improvement Plan, The
Southern Company Executive Productivity Improvement Plan, and the Incentive
Compensation Plan for Southern Electric International, Inc. includable as gross
income, overtime pay, any hourly shift differentials, substitution pay, such
amounts which are reimbursements to a Participant paid by any Employing Company
including, but not limited to, reimbursement for such items as moving expenses
and travel and entertainment expenses, and imputed income for automobile
expenses, tax preparation expenses and health and life insurance premiums paid
by the Employing Company.
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For Plan Years beginning on and after January 1, 1994, the Compensation
of each Participant taken into account for purposes of this Plan shall not
exceed $150,000 (as adjusted pursuant to Code Section 401(a)(17)). In
determining the Compensation of a Participant for purposes of this limitation,
the rules of Section 414(q)(6) of the Code shall apply, except in applying such
rules, the term "family" shall include only the spouse of the Participant and
any lineal descendants of the Participant who have not attained age 19 before
the close of the Plan Year. If, as a result of the application of the rules of
Code Section 414(q)(6), the adjusted dollar limitation is exceeded, then the
limitation shall be prorated among the affected individuals in proportion to
each such individual's Compensation, as determined under this Section 2.18 prior
to the application of this limitation.
2.19 "Contribution Percentage" shall mean the ratio (expressed as a
percentage), of the sum of the Voluntary Participant Contributions and Employer
Matching Contributions under the Plan on behalf of the Eligible Participant for
the Plan Year to the Eligible Participant's compensation for the Plan Year. For
the purpose of determining an Eligible Participant's Contribution Percentage for
a Plan Year, the Committee may elect to consider an Eligible Participant's
compensation for (a) the entire Plan Year or (b) that portion of the Plan Year
in which the individual is an Eligible Participant, provided that such election
is applied uniformly to all Eligible Participants for the Plan Year.
2.20 "Defined Benefit Plan Fraction" shall mean the following
fraction:
(numerator) Sum of the projected annual benefits of the
Participant under all Affiliated Employer defined benefit
plans (whether or not terminated) determined as
of the close of the Plan Year.
(denominator) The lesser of (a) the product of 1.25
multiplied by the dollar limitation in effect for the Plan
Year under Code Sections 415(b)(1)(A) or 415(d), or (b) 1.4
multiplied by 100% of the Participant's average compensation
for his highest three (3) consecutive Plan Years of
participation as adjusted under Treasury Regulation Section
1.415-5.
2.21 "Defined Contribution Plan Fraction" shall mean the
following fraction:
(numerator) The sum of all Annual Additions to the account
of the Participant as of the close of the Plan Year under
all defined contribution plans maintained by the Affiliated
Employers for the current and prior
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Limitation Years (whether or not terminated), including this
Plan.
(denominator) The sum of the lesser of the following amounts
determined for such Plan Year and for each prior Plan Year
in which the Participant has a Year of Service: (a) 1.25
multiplied by the dollar limitation in effect under Code
Section 415(c)(1)(A) for the Plan Year (determined without
regard to Code Section 415(c)(6)), or (b) 1.4 multiplied by
the amount that may be taken into account under Code Section
415(c)(1)(B) with respect to a Participant for the Plan
Year.
2.22 "Determination Date" shall mean with respect to a Plan Year, the
last day of the preceding Plan Year.
2.23 "Determination Year" shall mean the Plan Year being
tested.
2.24 "Distributee" shall include an Employee or former Employee. In
addition, the Employee's or former Employee's surviving spouse and the
Employee's or former Employee's spouse or former spouse who is an alternate
payee under a qualified domestic relations order, as defined in Section 414(p)
of the Code, are Distributees with regard to the interest of the spouse or
former spouse.
2.25 "Direct Rollover" shall mean a payment by the Plan to
the Eligible Retirement Plan specified by the Distributee.
2.26 "Elective Employer Contribution" shall mean contributions made
pursuant to Section 4.1 during the Plan Year by an Employing Company, at the
election of the Participant, in lieu of cash compensation and shall include
contributions made pursuant to a salary reduction agreement.
2.27 "Eligible Employee" shall mean an Employee who is employed by an
Employing Company and (a) who was eligible to be included in the Plan on January
1, 1991, or (b) who is a regular full-time, regular part-time, or cooperative
education employee other than:
(1) an Employee who is treated as such solely by reason of
the "leased employee" rules of Code Section 414(n);
(2) any Employee who is represented by a collective bargaining
agent unless the representatives of his bargaining unit and
the Employing Company mutually agree to participation in the
Plan subject to its terms by members of his bargaining unit;
and
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(3) an individual who is a cooperative education employee
and who first performs an Hour of Service on or after
January 1, 1995.
2.28 "Eligible Participant" shall mean an Eligible Employee who is
authorized to have Elective Employer Contributions or Voluntary Participant
Contributions allocated to his Account for the Plan Year.
2.29 "Eligible Retirement Plan" shall mean an individual retirement
account described in Section 408(a) of the Code, an individual retirement
annuity described in Section 408(b) of the Code, an annuity plan described in
Section 403(a) of the Code, or a qualified trust described in Section 401(a) of
the Code that accepts the Distributee's Eligible Rollover Distribution. However,
in the case of an Eligible Rollover Distribution to a surviving spouse, an
Eligible Retirement Plan is an individual retirement account or individual
retirement annuity.
2.30 "Eligible Rollover Distribution" shall mean any distribution of
all or any portion of the balance to the credit of the Distributee, except that
an Eligible Rollover Distribution does not include: (a) any distribution that is
one of a series of substantially equal periodic payments (not less frequently
than annually) made for the life (or life expectancy) of the Distributee, the
joint lives (or joint life expectancies) of the Distributee and the
Distributee's Beneficiary, or for a specified period of 10 years or more; (b)
any distribution to the extent such distribution is required under Section
401(a)(9) of the Code; and (c) the portion of any distribution that is not
includable in gross income (determined without regard to the exclusion for net
unrealized appreciation with respect to employer securities).
2.31 "Employee" shall mean each individual who is employed by an
Affiliated Employer under common law and each individual who is required to be
treated as an employee pursuant to the "leased employee" rules of Code Section
414(n) other than a leased employee described in Code Section 414(n)(5).
2.32 "Employer Matching Contribution" shall mean a contribution made by
an Employing Company pursuant to Section 5.1.
2.33 "Employing Company" shall mean the Company and any affiliate or
subsidiary of The Southern Company which the Board of Directors may from time to
time determine to bring under the Plan and which shall adopt the Plan, and any
successor of them. The Employing Companies are set forth on Appendix A to the
Plan as updated from time to time. No such entity shall be treated as an
Employing Company prior to the date it adopts the Plan.
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2.34 "Enrollment Date" shall mean the first day of each
calendar month.
2.35 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, or any successor statute, and the rulings and regulations
promulgated thereunder. In the event an amendment to ERISA renumbers a section
of ERISA referred to in this Plan, any such reference automatically shall become
a reference to such section as renumbered.
2.36 "Excess Aggregate Contributions" shall mean the amount referred to
in Code Section 401(m)(6)(B) with respect to a Participant.
2.37 "Excess Deferral Amount" shall mean the amount of Elective
Employer Contributions for a calendar year that exceed the Code Section 402(g)
limits as allocated to this Plan pursuant to Section 4.3(b).
2.38 "Excess Deferral Contributions" shall mean the amount of Elective
Employer Contributions on behalf of a Highly Compensated Employee in excess of
the maximum permitted under Section 4.5(a) as determined pursuant to Section
4.5(b).
2.39 "Family Member" shall mean the spouse, lineal ascendants and
descendants of an Employee or former Employee, and the spouses of such lineal
ascendants and descendants as described in Code Section 414(q)(6)(B).
2.40 "Highly Compensated Employee" shall mean any Employee or former
Employee (excluding any Employees who may be excluded pursuant to Code Section
414(q)(8)) who during the Determination Year or the Look-Back Year:
(a) was at any time a five-percent (5%) owner (as
defined in Code Section 416(i)(1)(B)(i));
(b) received compensation (within the meaning of Code
Section 414(q)(7)) from an Affiliated Employer in excess of $75,000 (or
such amount as may be adjusted by the Secretary of the Treasury);
(c) received compensation (within the meaning of Code
Section 414(q)(7)) from an Affiliated Employer in excess of $50,000 (or
such amount as may be adjusted by the Secretary of the Treasury) and
was in the top-paid group (as defined in Code Section 414(q)(4)) of
Employees for such year; or
(d) was at any time an officer and received
compensation (within the meaning of Code Section 414(q)(7))
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greater than fifty percent (50%) of the amount in effect under Code
Section 415(b)(1)(A) for such year.
Notwithstanding the foregoing, the determination of which Employees are
Highly Compensated Employees shall at all times be subject to the rules of Code
Section 414(q); the maximum number of officers taken into account under (d)
above shall not exceed fifty (50); and Employees who were not described in (b),
(c) or (d) above during the Look-Back Year shall not be considered as described
in such subsections for the Determination Year unless such Employees are members
of the group consisting of the one hundred (100) Employees paid the greatest
compensation (within the meaning of Code Section 414(q)(7)) for the
Determination Year.
A Highly Compensated Employee shall include any Employee who separated
from service (or was deemed to have separated) prior to the Plan Year, performs
no service for an Affiliated Employer during the Plan Year, and was a Highly
Compensated Employee for either the separation year or any Determination Year
ending on or after the Employee's fifty-fifth (55th) birthday.
If an Employee is, during a Determination Year or a Look-Back Year, a
Family Member of either (x) a five-percent (5%) owner who is an Employee or (y)
a former Employee or a Highly Compensated Employee who is one of the top-ten
most Highly Compensated Employees ranked on the basis of compensation paid by an
Affiliated Employer during such year, then the Family Member and the five-
percent (5%) owner or top-ten Highly Compensated Employee shall be treated as a
single employee receiving compensation and Plan contributions equal to the sum
of the compensation and contributions for such individuals.
2.41 "Hour of Service" shall mean each hour for which an Employee is
paid, or entitled to payment, for the performance of duties for an Affiliated
Employer.
2.42 "Investment Fund" shall mean any one of the funds described in
Article VIII which constitutes part of the Trust Fund.
2.43 "Key Employee" shall mean any Employee or former Employee (and his
Beneficiary) who is a key employee within the meaning of Code Section 416(i)(1).
2.44 "Limitation Year" shall mean the Plan Year.
2.45 "Look-Back Year" shall mean the Plan Year preceding the
Determination Year.
2.46 "Non-Highly Compensated Employee" shall mean an Employee who is
neither a Highly Compensated Employee nor the Family Member of a Highly
Compensated Employee.
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2.47 "Normal Retirement Date" shall mean the first day of the month
following a Participant's sixty-fifth (65th) birthday.
2.48 "One-Year Break in Service" shall mean each twelve-
consecutive-month period within the period commencing with an Employee's
Break-in-Service Date and ending on the date the Employee is again credited with
an Hour of Service.
2.49 "Participant" shall mean (a) an Eligible Employee who has elected
to participate in the Plan as provided in Article III and whose participation in
the Plan at the time of reference has not been terminated as provided in the
Plan and (b) an Employee or former Employee who has ceased to be a Participant
under (a) above, but for whom an Account is maintained under the Plan.
2.50 "Plan" shall mean The Southern Company Employee Savings Plan
(known as the Employee Savings Plan for The Southern Company System prior to
January 1, 1991), as described herein or as from time to time amended.
2.51 "Plan Year" shall mean the twelve-month period commencing January
1st and ending on the last day of December next following.
2.52 "Present Value of Accrued Retirement Income" shall mean an amount
determined solely for the purpose of determining if the Plan, or any other plan
included in a Required Aggregation Group of which the Plan is a part, is top
heavy in accordance with Code Section 416.
2.53 "SEPCO" shall mean Savannah Electric and Power Company.
2.54 "SEPCO Plan" shall mean the Employee Savings Plan of Savannah
Electric and Power Company as in effect December 31, 1992.
2.55 "SEPCO Transferred Account" shall mean the total amount credited
to the account of a Participant as described in Section 9.1(b).
2.56 "Super-Top-Heavy Group" shall mean an Aggregation Group that would
be a Top-Heavy Group if 90% were substituted for 60% in Section 2.58.
2.57 "Surviving Spouse" shall mean the person to whom the Participant
is married on the date of his death, if such spouse is then living, provided
that the Participant and such spouse shall have been married throughout the one
(1) year period ending on the date of the Participant's death.
2.58 "Top-Heavy Group" shall mean an Aggregation Group in
which, as of the Determination Date, the sum of:
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(a) the Present Value of Accrued Retirement Income of
Key Employees under all defined benefit plans included in that
group, and
(b) the Aggregate Accounts of Key Employees under all
defined contribution plans included in the group,
exceeds 60% of a similar sum determined for all employees.
2.59 "Trust" or "Trust Fund" shall mean the trust established
pursuant to the Trust Agreement.
2.60 "Trust Agreement" shall mean the trust agreement between the
Company and the Trustee, as described in Article XIV.
2.61 "Trustee" shall mean the person or corporation designated as
trustee under the Trust Agreement, including any successor or successors.
2.62 "Valuation Date" shall mean each business day of the New
York Stock Exchange.
2.63 "Voluntary Participant Contribution" shall mean a contribution
made pursuant to Section 4.6 during the Plan Year.
2.64 "Year of Service" shall mean a twelve-month period of employment
as an Employee, including any fractions thereof. Calculation of the twelve-month
periods shall commence with the Employee's first day of employment, which is the
date on which an Employee first performs an Hour of Service, and shall terminate
on his Break-in-Service Date. Thereafter, if he has more than one period of
employment as an Employee, his Years of Service for any subsequent period shall
commence with the Employee's reemployment date, which is the first date
following a Break-in-Service Date on which the Employee performs an Hour of
Service, and shall terminate on his next Break-in-Service Date. An Employee who
has a Break-in- Service Date and resumes employment with the Affiliated
Employers within twelve months of his Break-in-Service Date shall receive a
fractional Year of Service for the period of such cessation of employment.
For purposes of determining an Employee's eligibility to participate,
the following years of service shall also be treated as Years of Service:
(a) In respect of an Employee of an Employing Company who
transfers to an Employing Company from Southern Electric International,
Inc. following its adoption of a plan containing a cash or deferred
arrangement under Section 401(k) of the Code, his credited years of
service under such plan as of his date of transfer.
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(b) In respect of an Employee of an Employing Company who
transfers to an Employing Company from SEPCO on or before December 31,
1992, his credited years of service under the SEPCO Plan for actual
service while employed at SEPCO as of the date of his transfer.
Notwithstanding anything in this Section 2.64 to the contrary, an
Employee shall not receive credit for more than one Year of Service with respect
to any twelve-consecutive-month period.
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ARTICLE III
PARTICIPATION
3.1 Eligibility Requirements. Each Eligible Employee who was an active
Participant on July 2, 1995 shall continue to be an active Participant in this
Plan on July 3, 1995, provided he remains an Eligible Employee. Each other
Eligible Employee may elect to participate in the Plan as of any Enrollment Date
after he has completed a Year of Service. An Eligible Employee shall make an
election to participate by authorizing deductions from or reduction of his
Compensation as contributions to the Plan in accordance with Article IV, and
directing the investment of such contributions in accordance with Article VIII.
Such Compensation deduction and/or reduction authorization and investment
direction shall be made in accordance with the procedures established by the
Committee.
3.2 Participation upon Reemployment. If an Employee terminates his
employment with an Affiliated Employer and is subsequently reemployed as an
Eligible Employee, the following rules shall apply in determining his
eligibility to participate:
(a) If the reemployed Eligible Employee had not completed
the Year of Service requirement of Section 3.1 prior to his termination
of employment and is reemployed following a One-Year Break in Service,
he shall not receive credit for fractional periods of service completed
prior to the One-Year Break in Service until he has completed a Year of
Service after his return. A reemployed Employee who had not completed
the Year of Service requirement and who is reemployed within 12 months
of his Break-in-Service Date shall receive service credit for the
period in which he performed no services in accordance with Section
2.64.
(b) If the reemployed Eligible Employee fulfilled the
eligibility requirements of Section 3.1 prior to his termination of
employment and is reemployed as an Eligible Employee, whether before or
after he incurs a One-Year Break in Service, he may elect to become a
Participant in the Plan as of the date of his reemployment.
3.3 No Restoration of Previously Distributed Benefits. A Participant
who has terminated his employment with the Affiliated Employers and who has
received a distribution of the amount credited to his Account pursuant to
Section 12.5 shall not be entitled to restore the amount of such distribution to
his Account if he is reemployed and again becomes a Participant in the Plan.
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3.4 Loss of Eligible Employee Status. If a Participant loses his status
as an Eligible Employee, but remains an Employee, such Participant shall be
ineligible to participate and shall be deemed to have elected to suspend making
Voluntary Participant Contributions or to have Elective Employer Contributions
made on his behalf.
3.5 Special Rule for Scott Paper Company Energy Complex Employees. An
Eligible Employee who was an employee of Scott Paper Company Energy Complex on
December 16, 1994, and who became an Employee of an Employing Company effective
December 17, 1994, shall be credited with a Year of Service as of December 31,
1994, and may elect to become a Participant as of any Enrollment Date commencing
on or after January 1, 1995.
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ARTICLE IV
ELECTIVE EMPLOYER CONTRIBUTIONS AND
VOLUNTARY PARTICIPANT CONTRIBUTIONS
4.1 Elective Employer Contributions. An Eligible Employee who meets the
participation requirements of Article III may elect on a form provided by the
Employing Company to have his Compensation reduced by a whole percentage of his
Compensation, which percentage shall not be less than one percent (1%) nor more
than sixteen percent (16%) of his Compensation, such Elective Employer
Contribution to be contributed to his Account under the Plan.
4.2 Maximum Amount of Elective Employer Contributions. The maximum
amount of Elective Employer Contributions that may be made on behalf of a
Participant during any Plan Year to this Plan or any other qualified plan
maintained by an Employing Company shall not exceed the dollar limitation set
forth in Section 402(g) of the Code in effect at the beginning of such Plan
Year.
4.3 Distribution of Excess Deferral Amounts.
(a) In General. Notwithstanding any other provision of the
Plan, Excess Deferral Amounts and income allocable thereto shall be
distributed (and any corresponding Employer Matching Contributions
shall be forfeited) no later than April 15, 1996, and each April 15
thereafter, to Participants who allocate (or are deemed to allocate)
such amounts to this Plan pursuant to (b) below for the preceding
calendar year. Excess Deferral Amounts that are distributed shall not
be treated as an Annual Addition. Any Employer Matching Contributions
forfeited pursuant to this subsection (a) shall be applied, subject to
Section 6.1, toward funding Employing Company contributions (for the
Plan Year immediately following the Plan Year to which such forfeited
Employer Matching Contributions relate) or distributed, as directed by
the Committee, to the extent permitted by applicable law.
(b) Assignment. The Participant's allocation of amounts in
excess of the Code Section 402(g) limits to this Plan shall be in
writing; shall be submitted to the Committee no later than March 1;
shall specify the Participant's Excess Deferral Amount for the
preceding calendar year; and shall be accompanied by the Participant's
written statement that if such amounts are not distributed, such Excess
Deferral Amount, when added to amounts deferred under other plans or
arrangements described in Section 401(k), 408(k), 402(h)(1)(B), 457,
501(c)(18), or 403(b) of the Code, exceeds the limit imposed on the
Participant by Section 402(g) of the
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Code for the year in which the deferral occurred. A Participant is
deemed to notify the Committee of any Excess Deferral Amounts that
arise by taking into account only those deferrals under this Plan and
any other plans of an Employing Company.
(c) Determination of Income or Loss. The Excess Deferral
Amount distributed to a Participant with respect to a calendar year
shall be adjusted for income or loss through the last day of the Plan
Year or the date of distribution, as determined by the Committee. The
income or loss allocable to Excess Deferral Amounts is the sum of:
(1) income or loss allocated to the Participant's
Account for the taxable year multiplied by a fraction, the
numerator of which is such Participant's Excess Deferral
Amount for the year and the denominator is the Participant's
Account balance attributable to Elective Employer
Contributions, minus any income or plus any loss occurring
during the Plan Year; and
(2) if the Committee shall determine in its sole
discretion, ten percent (10%) of the amount determined under
(1) above multiplied by the number of whole calendar months
between the end of the Plan Year and the date of the
distribution, counting the month of distribution if
distribution occurs after the 15th of the month.
Notwithstanding the above, the Committee may designate any reasonable
method for computing the income or loss allocable to Excess Deferral Amounts,
provided that the method does not violate Section 401(a)(4) of the Code, is used
consistently for all Participants and for all corrective distributions under the
Plan for the Plan Year, and is used by the Plan for allocating income or loss to
Participants' Accounts.
(3) Maximum Distribution Amount. The Excess
Deferral Amount, which would otherwise be distributed to the
Participant, shall, if there is a loss allocable to such
Excess Deferral Amount, in no event be less than the lesser
of the Participant's Account under the Plan attributable to
Elective Employer Contributions or the Participant's
Elective Employer Contributions for the Plan Year.
4.4 Additional Rules Regarding Elective Employer
Contributions.
Salary reduction agreements shall be governed by the following:
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(a) A salary reduction agreement shall apply to payroll
periods during which such salary reduction agreement is in effect. The
Committee, in its discretion, may establish administrative procedures
whereby the actual reduction in Compensation may be made to coincide
with each payroll period of the Employing Company, or at such other
times as the Committee may determine.
(b) The Employing Company may amend or revoke its salary
reduction agreement with any Participant at any time, if the Employing
Company determines that such revocation or amendment is necessary to
ensure that a Participant's additions for any Plan Year will not exceed
the limitations of Sections 4.2 and 6.1 of the Plan or to ensure that
the Actual Deferral Percentage Test is satisfied.
(c) Except as required under (b) above, and under Section
4.5(d) below, no amounts attributable to Elective Employer
Contributions may be distributed to a Participant or his Beneficiary
from his Account prior to the earlier of:
(1) the separation from service, death or
disability of the Participant;
(2) the attainment of age 59 1/2 by the
Participant;
(3) the termination of the Plan without
establishment of a successor plan;
(4) a financial hardship of the Participant
pursuant to Section 11.6 of the Plan;
(5) the date of a sale by an Employing Company
to an entity that is not an Affiliated
Employer of substantially all of the assets
(within the meaning of Code Section
409(d)(2)) with respect to a Participant
who continues employment with the
corporation acquiring such assets; or
(6) the date of the sale by an Employing
Company or an Affiliated Employer of its
interest in a subsidiary (within the
meaning of Code Section 409(d)(3)) to an
entity which is not an Affiliated Employer
with respect to the Participant who
continues employment with such subsidiary.
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4.5 Section 401(k) Nondiscrimination Tests.
(a) Actual Deferral Percentage Test. The Plan shall
satisfy the nondiscrimination test of Section 401(k)(3) of
the Code, under which no Elective Employer Contributions
shall be made that would cause the Actual Deferral
Percentage for Eligible Participants who are Highly
Compensated Employees to exceed (1) or (2) as follows:
(1) The Average Actual Deferral Percentage
for the Eligible Participants who are Highly
Compensated Employees for the Plan Year shall not
exceed the Average Actual Deferral Percentage for
Eligible Participants who are Non-Highly
Compensated Employees for the Plan Year multiplied
by 1.25; or
(2) The Average Actual Deferral Percentage
for Eligible Participants who are Highly
Compensated Employees for the Plan Year shall not
exceed the Average Actual Deferral Percentage for
Eligible Participants who are Non-Highly
Compensated Employees for the Plan Year multiplied
by two (2), provided that the Average Actual
Deferral Percentage for Eligible Participants who
are Highly Compensated Employees does not exceed
the Average Actual Deferral Percentage for Eligible
Participants who are Non-Highly Compensated
Employees by more than two (2) percentage points.
(b) Amount of Excess Deferral Contributions. The
amount of Excess Deferral Contributions for a Highly
Compensated Employee for a Plan Year is to be determined
by the leveling method described in Treasury Regulation
Section 1.401(k)-l(f)(2), under which the Actual
Deferral Percentage of the Highly Compensated Employee
with the highest Actual Deferral Percentage shall be
reduced to the extent required to:
(1) enable the Plan to satisfy the Actual
Deferral Percentage Test, or
(2) cause such Highly Compensated
Employee's Actual Deferral Percentage to equal the
ratio of the Highly Compensated Employee with the
next highest Actual Deferral Percentage.
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This process must be repeated until the Plan satisfies the Actual
Deferral Percentage Test. The amount of Excess Deferral Contributions for a
Highly Compensated Employee is equal to the total of Elective Employer
Contributions and other contributions taken into account for the Actual Deferral
Percentage Test minus the amount determined by multiplying the Employee's
contribution percentage, as determined above, by his compensation.
(c) Correction for Family Members. In the case of a Highly
Compensated Employee whose Actual Deferral Percentage is determined
under the family aggregation rules described in Treasury Regulation
Section 1.401(k)-1(g)(1)(ii)(C), the determination and correction of
the amount of Excess Deferral Contributions is accomplished by reducing
the Actual Deferral Percentage as required under (b) above and
allocating the excess for the family group among the Family Members in
proportion to the Elective Employer Contributions of each Family Member
that is combined to determine the Actual Deferral Percentage.
(1) If a Highly Compensated Employee is subject to
the family aggregation rules of Code Section 414(q)(6)
because that Eligible Participant is either a five- percent
owner or one of the 10 Highly Compensated Employees
receiving the most compensation from the Affiliated
Employers, the combined Actual Deferral Percentage for the
family group (which is treated as one Highly Compensated
Employee) must be determined by combining the Elective
Employer Contributions, compensation, and amounts treated as
Elective Employer Contributions of the eligible Family
Members.
(2) The Elective Employer Contributions,
compensation, and amounts treated as Elective Employer
Contributions of all Family Members are disregarded for
purposes of determining the Actual Deferral Percentage for
the group of Non-Highly Compensated Employees.
(3) If an Eligible Employee is required to be
aggregated as a member of more than one family group in a
plan, all Eligible Employees who are members of those family
groups that include that Employee are aggregated as one
family group.
(d) Correction of Excess Deferral Contributions.
(1) In General. Notwithstanding any other
provisions of this Plan, Excess Deferral Contributions
plus any income and minus any loss allocable thereto
shall be distributed (and any corresponding Employer
Matching Contribution shall be forfeited) to
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Participants on whose behalf such Excess Deferral
Contributions were made not later than the last day of the
Plan Year following the close of the Plan Year for which
such contributions were made. If such Excess Deferral
Contributions are not distributed within two and one-half
(2-1/2) months after the last day of the Plan Year in which
such excess amounts arose, a ten percent (10%) excise tax
will be imposed on the Employing Company maintaining the
Plan with respect to such amounts. Distribution of Excess
Deferral Contributions shall be made to Highly Compensated
Employees on the basis of the respective portions of the
Excess Deferral Contributions attributable to each of such
Employees. Any Employer Matching Contributions forfeited
pursuant to this Subsection (d)(1) shall be applied, subject
to Section 6.1, toward funding Employing Company
contributions (for the Plan Year immediately following the
Plan Year to which such forfeited Employer Matching
Contributions relate) or distributed, as directed by the
Committee, to the extent permitted by applicable law.
(2) Determination of Income or Loss. Excess
Deferral Contributions shall be adjusted for any income or
loss through the last day of the Plan Year or the date of
distribution, as determined by the Committee. The income or
loss allocable to Excess Deferral Contributions is the sum
of:
(A) income or loss allocated to the
Participant's Account for the taxable year
multiplied by a fraction, the numerator of which is
the Participant's Excess Deferral Contributions for
the year and the denominator is the Participant's
Account balance attributable to Elective Employer
Contributions, minus any income or plus any loss
occurring during the Plan Year; and
(B) if the Committee shall determine in its
sole discretion, ten percent (10%) of the amount
determined under (A) above multiplied by the number
of whole calendar months between the end of the
Plan Year and the date of the distribution,
counting the month of distribution if distribution
occurs after the 15th of the month.
Notwithstanding the above, the Committee may designate any reasonable
method for computing the income or loss allocable to Excess Deferral
Contributions, provided that the method does not violate Section 401(a)(4) of
the Code, is used consistently for all
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Participants and for all corrective distributions under the Plan for the Plan
Year, and is used by the Plan for allocating income or loss to Participants'
Accounts.
(3) Maximum Distribution Amount. The Excess
Deferral Contributions which would otherwise be distributed
to the Participant shall be adjusted for income; shall be
reduced, in accordance with regulations, by the Excess
Deferral Amount distributed to the Participant; and shall,
if there is a loss allocable to the Excess Deferral
Contributions, in no event be less than the lesser of the
Participant's Account under the Plan attributable to
Elective Employer Contributions or the Participant's
Elective Employer Contributions for the Plan Year.
(e) Special Rules.
(1) For purposes of this Section 4.5, the Actual
Deferral Percentage for any Eligible Participant who is a
Highly Compensated Employee for the Plan Year and who is
eligible to have deferral contributions allocated to his
account under two (2) or more plans or arrangements
described in Section 401(k) of the Code that are maintained
by an Affiliated Employer shall be determined as if all such
deferral contributions were made under a single arrangement.
If a Highly Compensated Employee participates in two (2) or
more cash or deferred arrangements that have different plan
years, all cash or deferred arrangements ending with or
within the same calendar year shall be treated as a single
arrangement. Notwithstanding the foregoing, certain plans
shall be treated as separate if mandatorily disaggregated
under Code Section 401(k).
(2) In the event that this Plan satisfies the
requirements of Code Section 401(k), 401(a)(4), or 410(b)
only if aggregated with one or more other plans, or if one
or more other plans satisfy the requirements of Code Section
401(k), 401(a)(4), or 410(b) only if aggregated with this
Plan, then the actual deferral percentages shall be
determined as if all such plans were a single plan.
(3) For purposes of determining the Actual Deferral
Percentage of an Eligible Participant who is a five-percent
owner or one of the 10 Highly Compensated Employees
receiving the most compensation from Affiliated Employers,
the Elective Employer Contributions and compensation of such
Participant shall include the Elective Employer
Contributions and
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compensation of Family Members, and such Family Members
shall be disregarded in determining the Actual Deferral
Percentage for Eligible Participants who are Non-Highly
Compensated Employees.
(4) The determination and treatment of the Elective
Employer Contributions and Actual Deferral Percentage of any
Eligible Participant shall satisfy such other requirements
as may be prescribed by the
Secretary of the Treasury.
4.6 Voluntary Participant Contributions. An Eligible Employee who meets
the participation requirements of Article III may elect in accordance with the
procedures established by the Committee to contribute to his Account a Voluntary
Participant Contribution consisting of any whole percentage of his Compensation,
which percentage is not less than one percent (1%) nor more than sixteen percent
(16%) of his Compensation. The maximum Voluntary Participant Contribution shall
be reduced by the percent, if any, which is contributed as an Elective Employer
Contribution on behalf of such Participant under Section 4.1.
4.7 Manner and Time of Payment of Elective Employer Contributions and
Voluntary Participant Contributions. Contributions made in accordance with
Sections 4.1 and 4.6 will be rounded to the next higher multiple of one dollar
on a monthly basis. They will be made only through payroll deductions and will
begin with the first payroll period (or as soon as practicable thereafter)
commencing after the Enrollment Date on which the Participant commences
participation in the Plan. Contributions shall be remitted to the Trustee as of
the earliest date on which such contributions can reasonably be segregated from
each Employing Company's general assets, but in any event within ninety (90)
days from the date on which such amounts would otherwise have been payable to
the Participant in cash.
4.8 Change in Contribution Rate. A Participant may prospectively change
the percentage of his Compensation that he has authorized as the Elective
Employer Contribution to be made on his behalf or his Voluntary Participant
Contribution to another permissible percentage in accordance with the procedures
established by the Committee. Such election shall be effective as soon as
practicable after it is made.
4.9 Change in Contribution Amount. In the event of a change in the
Compensation of a Participant, the percentage of the Elective Employer
Contribution made on his behalf or his Voluntary Participant Contribution
currently in effect shall be applied as soon as practicable with respect to such
changed Compensation without action by the Participant.
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4.10 Rollover Contributions and Direct Transfers from Other
Qualified Retirement Plans.
(a) Effective December 1, 1991, a Participant shall be
entitled to transfer (or cause to be transferred directly from the
trustee) to the Trust to be held as part of his Account all or a
portion of the fair market value of the cash or other property a
Participant receives in the distribution of his accrued benefits under
the Profit Sharing Plan for Electric City Merchandise Company, Inc.,
reduced by any voluntary participant contributions under such plan.
Such rollover contribution may only be made within sixty (60) days
following the date the Participant receives the distribution (or within
such additional period as may be provided under Section 408 of the Code
if the Participant shall have made a timely deposit of the distribution
in an individual retirement account). No such rollover contribution or
trustee to Trustee transfer shall be made by a Participant (or on his
behalf) if not otherwise permissible under the Code or if such rollover
contribution or transfer would subject this Plan to the requirements of
Section 401(a)(11)(A) of the Code.
Notwithstanding the foregoing, the Trustee is specifically
authorized to accept any rollover accounts under the terms of the SEPCO
Plan as are necessary to reflect a Participant's interest in the Plan
resulting from the merger of the SEPCO Plan into this Plan effective as
of January 1, 1993. Any such rollover account shall be held as part of
the Participant's Account and shall be subject to the requirements of
Article XVIII.
(b) Any amounts so transferred to the Trust shall be
entitled to share in earnings or losses of the Trust in the same manner
as other Employing Company contributions to the Trust.
(c) The portion of a Participant's Account attributable to
any rollover contribution or trustee to Trustee transfer shall be
distributed with the balance of the Participant's Account pursuant to
Article XII of the Plan.
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ARTICLE V
EMPLOYER MATCHING CONTRIBUTIONS
5.1 Amount of Employer Matching Contributions. The Board of Directors,
in its sole and absolute discretion, shall determine the amount of Employer
Matching Contributions that shall be made by each Employing Company on behalf of
each Participant in its employ. The amount of Employer Matching Contributions
shall be fixed by resolutions of the Board of Directors and communicated to each
Employing Company prior to the first day of each Plan Year.
5.2 Investment of Employer Matching Contributions. Employer
Matching Contributions shall be invested entirely in the Company
Stock Fund, as described in Article VIII.
5.3 Payment of Employer Matching Contributions. Except as
provided herein, Employer Matching Contributions shall be remitted
to the Trustee as soon as practicable.
5.4 Limitations on Employer Matching Contributions and
Voluntary Participant Contributions.
(a) Actual Contribution Percentage Test. The Plan shall
satisfy the nondiscrimination test of Section 401(m) of the Code, under
which the Average Contribution Percentage for Eligible Participants
shall not exceed (1) or (2) as follows:
(1) The Average Contribution Percentage for
Eligible Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the Average
Contribution Percentage for Eligible Participants who
are Non-Highly Compensated Employees for the Plan Year
multiplied by 1.25; or
(2) The Average Contribution Percentage for
Eligible Participants who are Highly Compensated Employees
for the Plan Year shall not exceed the Average Contribution
Percentage for Eligible Participants who are Non-Highly
Compensated Employees for the Plan Year multiplied by two
(2), provided that the Average Contribution Percentage for
Eligible Participants who are Highly Compensated Employees
does not exceed the Average Contribution Percentage for
Eligible Participants who are Non-Highly Compensated
Employees by more than two (2) percentage points.
(b) Multiple Use Limitation. If both the Average
Actual Deferral Percentage and the Average Contribution
Percentage of the Highly Compensated Employees exceed 1.25 of
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the Average Actual Deferral Percentage and the Average Contribution
Percentage of the Non-Highly Compensated Employees and if one or more
Highly Compensated Employees makes Elective Employer Contributions and
receives Employer Matching Contributions, and the sum of the Actual
Deferral Percentage and Actual Contribution Percentage of those Highly
Compensated Employees subject to either or both tests exceed the
aggregate limit as defined in Treasury Regulation Section 1.401(m)-2,
then one of the following actions shall be taken.
(1) The Contribution Percentage and/or Actual
Deferral Percentage of Highly Compensated Employees may be
reduced (beginning with such Highly Compensated Employee
whose Contribution Percentage and/or Actual Deferral
Percentage is the highest) so that the aggregate limit is
not exceeded. The amount by which each Highly Compensated
Employee's Contribution Percentage and/or Actual Deferral
Percentage amount is reduced shall be treated as an Excess
Aggregate Contribution.
(2) The Employing Companies may make qualified
nonelective contributions in accordance with Treasury
Regulation Sections 1.401(k)-1(b)(5) and (f)(1) and/or
Section 1.401(m)-1(b)(5) and (e)(1).
For purposes of determining if the aggregate limit has been exceeded,
the Actual Deferral Percentage and the Contribution Percentage of the Highly
Compensated Employees shall be determined after any corrections required to meet
the Actual Deferral Percentage Test and the Actual Contribution Percentage Test.
5.5 Special Rules for Employer Matching Contributions and
Voluntary Participant Contributions.
(a) The Contribution Percentage for any Eligible Participant
who is a Highly Compensated Employee for the Plan Year and who is
eligible to make voluntary participant contributions, to receive
employer matching contributions, or to make deferral contributions
under two or more plans described in Section 401(a) of the Code or
arrangements described in Section 401(k) of the Code that are
maintained by an Affiliated Employer shall be determined as if all such
contributions were made under a single plan.
(b) In the event that this Plan satisfies the requirements
of Code Section 401(m), 401(a)(4), or 410(b) only if aggregated with
one or more other plans, or if one or more other plans satisfy the
requirements of Code Section 401(m), 401(a)(4), or 410(b) only if
aggregated with this Plan, then
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the contribution percentages shall be determined as if all
such plans were a single plan.
(c) For purposes of determining the Contribution Percentage
of an Eligible Participant who is a five-percent owner or one of the 10
Highly Compensated Employees receiving the most compensation from the
Affiliated Employers, the Voluntary Participant Contributions, Employer
Matching Contributions, and compensation of such Participant shall
include the Voluntary Participant Contributions, Employer Matching
Contributions, and compensation of Family Members, and such Family
Members shall be disregarded in determining the Contribution Percentage
for Eligible Participants who are Non-Highly Compensated Employees.
(d) The determination and treatment of the Contribution
Percentage of any Eligible Participant shall satisfy such other
requirements as may be prescribed by the Secretary of the Treasury.
5.6 Distribution of Excess Aggregate Contributions.
(a) In General. Notwithstanding any other provision of this
Plan, Excess Aggregate Contributions, plus any income and minus any
loss allocable thereto, shall be distributed (or, if forfeitable,
forfeited) no later than the last day of each Plan Year to Participants
to whose Accounts such Excess Aggregate Contributions were allocated
for the preceding Plan Year. Excess Aggregate Contributions shall be
allocated to Participants who are subject to the Family Member
aggregation rules of Section 414(q)(6) of the Code in the manner
prescribed by regulations. If such Excess Aggregate Contributions are
distributed more than 2-1/2 months after the last day of the Plan Year
in which such excess amounts arose, a ten percent (10%) excise tax will
be imposed on the Employing Company maintaining the Plan with respect
to those amounts. Excess Aggregate Contributions shall be treated as
Annual Additions.
(b) Determination of Income or Loss. Excess Aggregate
Contributions shall be adjusted for any income or loss through the last
day of the Plan Year or the date of distribution, as determined by the
Committee. The income or loss allocable to Excess Aggregate
Contributions is the sum of:
(1) income or loss allocated to the Participant's
Account attributable to Voluntary Participant Contributions
and Employer Matching Contributions for the Plan Year
multiplied by a fraction, the numerator of which is the
Participant's Excess Aggregate Contributions for the year
and the denominator is the
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Participant's Account balance attributable to Voluntary
Participant Contributions and Employer Matching
Contributions, minus any income or plus any loss occurring
during the Plan Year; and
(2) if the Committee shall determine in its sole
discretion, ten percent (10%) of the amount determined under
(1) above multiplied by the number of whole calendar months
between the end of the Plan Year and the date of the
distribution, counting the month of distribution if
distribution occurs after the 15th of the month.
Notwithstanding the above, the Committee may designate any reasonable
method for computing the income or loss allocable to Excess Aggregate
Contributions, provided that the method does not violate Section 401(a)(4) of
the Code, is used consistently for all Participants and for all corrective
distributions under the Plan for the Plan Year, and is used by the Plan for
allocating income or loss to Participants' Accounts.
(c) Accounting for Excess Aggregate Contributions. Excess
Aggregate Contributions shall be distributed first from Voluntary
Participant Contributions allocated to the Participant's Account and
any corresponding Employer Matching Contribution shall also be
forfeited and then, if necessary, distributed from the remaining
Employer Matching Contribution allocated to the Participant's Account.
5.7 Reversion of Employing Company Contributions. Employing
Company contributions computed in accordance with the provisions of
this Plan shall revert to the Employing Company under the following
circumstances:
(a) In the case of an Employing Company contribution which
is made by reason of a mistake of fact, such contribution upon written
direction of the Employing Company shall be returned to the Employing
Company within one year after the payment of the contribution.
(b) If any Employing Company contribution is determined to
be nondeductible under Section 404 of the Code, then such Employing
Company contribution, to the extent that it is determined to be
nondeductible, upon written direction of the Employing Company shall be
returned to the Employing Company within one year after the
disallowance of the deduction.
The amount which may be returned to the Employing Company under this
Section 5.7 is the excess of (1) the amount contributed over (2) the amount that
would have been contributed had there not occurred a mistake of fact or
disallowance of the deduction.
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Earnings attributable to the excess contribution shall not be returned to the
Employing Company, but losses attributable thereto shall reduce the amount to be
so returned. If the withdrawal of the amount attributable to the mistaken
contribution would cause the balance of the Account of any Participant to be
reduced to less than the balance which would have been in the Account had the
mistaken amount not been contributed, then the amount to be returned to the
Employing Company shall be limited so as to avoid such reduction.
5.8 Correction of Prior Incorrect Allocations and Distributions.
Notwithstanding any provisions contained herein to the contrary, in the event
that, as of any Valuation Date, adjustments are required in any Participants'
Accounts to correct any incorrect allocation of contributions or investment
earnings or losses, or such other discrepancies in Account balances that may
have occurred previously, the Employing Companies may make additional
contributions to the Plan to be applied to correct such incorrect allocations or
discrepancies. The additional contributions shall be allocated by the Committee
to adjust such Participants' Accounts to the value which would have existed on
said Valuation Date had there been no prior incorrect allocation or
discrepancies. The Committee shall also be authorized to take such other actions
as it deems necessary to correct prior incorrect allocations or discrepancies in
the Accounts of Participants under the Plan.
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ARTICLE VI
LIMITATIONS ON CONTRIBUTIONS
6.1 Section 415 Limitations.
(a) Notwithstanding any provision of the Plan to the
contrary, the total Annual Additions allocated to the Account (and the
accounts under all defined contribution plans maintained by an
Affiliated Employer) of any Participant for any Limitation Year in
accordance with Code Section 415 and the regulations thereunder, which
are incorporated herein by this reference, shall not exceed the lesser
of the following amounts:
(1) twenty-five percent (25%) of the Participant's
compensation in the Limitation Year; or
(2) $30,000 (as adjusted pursuant to Code Section
415(d)(1)(C)).
(b) If a Participant is also a participant in any Affiliated
Employer's defined benefit plan, then in addition to the limitations in
(a) above, the sum of the Defined Benefit Plan Fraction and Defined
Contribution Plan Fraction shall not exceed 1.0 for any Limitation
Year.
(c) For purposes of this Section 6.1, wherever the term
"compensation" is used, such term shall mean all amounts paid or made
available to an Employee which are treated as compensation from an
Affiliated Employer under Treasury Regulation Section 1.415-2(d)(2) and
which are not excluded from compensation under Treasury Regulation
Section 1.415- 2(d)(3).
(d) The Annual Addition for any Plan Year beginning before
January 1, 1987 shall not be recomputed to treat all Voluntary
Participant Contributions as an Annual Addition.
(e) If the Plan satisfied the applicable requirements of
Section 415 of the Code as in effect for all Plan Years beginning
before January 1, 1987, an amount shall be subtracted from the
numerator of the Defined Contribution Plan Fraction (not exceeding the
numerator), as prescribed by the Secretary of the Treasury, so that the
sum of the Defined Benefit Plan Fraction and the Defined Contribution
Plan Fraction computed under Section 415(e)(1) of the Code (as revised
by this Section 6.1) does not exceed 1.0 for the Plan Year. In
addition, the Defined Contribution Plan Fraction for
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a Participant may be determined by taking into account the special
transition rule of Code Section 415(e)(6).
(f) If the Participant was a participant in one or more
defined benefit plans maintained by the Affiliated Employers which were
in existence on July 1, 1982, the denominator of the Defined Benefit
Plan Fraction shall not be less than 1.25% of the sum of the annual
benefits under such plans which the Participant had accrued as of the
later of September 30, 1983 or the end of the last Limitation Year
beginning before January 1, 1983. The preceding sentence applies only
if the defined benefit plans individually, and in the aggregate satisfy
the requirements of Code Section 415 as in effect at the end of the
1982 Limitation Year.
6.2 Correction of Contributions in Excess of Section 415 Limits. If the
Annual Additions for a Participant exceed the limits of Section 6.1 as a result
of the allocation of forfeitures, if any, a reasonable error in estimating a
Participant's annual compensation for purposes of the Plan, a reasonable error
in determining the amount of elective deferrals (within the meaning of Section
402(g)(3) of the Code) that may be made with respect to any individual, or under
other limited facts and circumstances that the Commissioner of the Treasury
finds justify the availability of the rules set forth in this Section 6.2, the
excess amounts shall not be deemed Annual Additions if they are treated in
accordance with any one or more or any combination of the following:
(a) distribute to the Participant that portion, or all,
of his Elective Employer Contributions (as adjusted
for income and loss) as is necessary to ensure
compliance with Section 6.1;
(b) return to the Participant that portion, or all, of
his Voluntary Participant Contributions (as
adjusted for income and loss) as is necessary to
ensure compliance with Section 6.1; and
(c) forfeiture of that portion, or all, of the Employer
Matching Contributions (as adjusted for income and
loss) and any forfeitures of Employer contributions
that were allocated to the Participant's Account
(as adjusted for income and loss), as is necessary
to ensure compliance with Section 6.1.
Any amounts distributed or returned to the Participant under (a) or (b)
above shall be disregarded for purposes of the Actual Deferral Percentage Test
and for purposes of the Actual Contribution Percentage Test.
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Any amounts forfeited under this Section 6.2 shall be held in a suspense
account and shall be applied, subject to Section 6.1, toward funding the
Employer Matching Contributions for the next succeeding Plan Year. Such
application shall be made prior to any Employing Company contributions and prior
to any Employer Matching Contributions that would constitute Annual Additions.
No income or investment gains and losses shall be allocated to the suspense
account provided for under this Section 6.2. If any amount remains in a suspense
account provided for under this Section 6.2 upon termination of this Plan, such
amount will revert to the Employing Companies notwithstanding any other
provision of this Plan.
6.3 Combination of Plans. Notwithstanding any provisions contained
herein to the contrary, in the event that a Participant participates in a
defined contribution plan or defined benefit plan required to be aggregated with
this Plan under Code Section 415(g) and the sum of the Defined Contribution Plan
Fraction and Defined Benefit Plan Fraction with respect to a Participant exceeds
the limitations contained in Section 6.1(b), corrective adjustments (a) for an
Employee shall not be made under this Plan until made under such other defined
benefit plan and (b) for a former employee shall not be made under this Plan
until the corrective adjustments have been made under such other defined
contribution plan and defined benefit plan. If an Employee participates in more
than one defined contribution plan maintained by an Affiliated Employer and his
Annual Additions exceed the limitations of Section 6.1(a), corrective
adjustments shall be made first under this Plan and then, to the extent
necessary, under such other defined contribution plan.
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ARTICLE VII
SUSPENSION OF CONTRIBUTIONS
7.1 Suspension of Contributions. A Participant may (on a prospective
basis) voluntarily suspend the Elective Employer Contributions made on his
behalf and his Voluntary Participant Contributions in accordance with the
procedures established by the Committee. Such suspension shall be effective as
soon as practicable after it is made. Whenever Elective Employer Contributions
made on a Participant's behalf and Voluntary Participant Contributions are
suspended, Employer Matching Contributions shall also be suspended.
7.2 Resumption of Contributions. A Participant may terminate
prospectively any such suspension in accordance with the procedures established
by the Committee. Such resumption of contributions shall be effective as soon as
practicable after the election to terminate prospectively the suspension is
made. There shall be no make up of any contributions by a Participant or by an
Employing Company with respect to a period of suspension.
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ARTICLE VIII
INVESTMENT OF PARTICIPANTS' CONTRIBUTIONS
8.1 Investment Funds. Elective Employer Contributions and Voluntary
Participant Contributions which are paid to the Trustee shall be added to such
one or more of the Investment Funds constituting part of the Trust Fund and in
such proportions and amounts as may be determined in accordance with this
Article VIII. The Investment Funds shall be selected from time to time by the
Pension Fund Investment Review Committee of the Southern Company System. Such
Investment Funds shall include the:
"Company Stock Fund", which shall be invested and reinvested in Common
Stock, provided that funds applicable to the purchase of Common Stock pending
investment of such funds may be temporarily invested in short-term United States
Government obligations, other obligations guaranteed by the United States
Government, or commercial paper and, if the Trustee so determines, may be
transferred to money market funds utilized by the Trustee for qualified employee
benefit trusts.
8.2 Investment of Participant Contributions. Each Participant shall
direct, at the time he elects to participate in the Plan and at such other times
as may be directed by the Committee, that his Account (other than Employer
Matching Contributions) be invested in one or more of the Investment Funds,
provided such investments are made in one-percent (1%) increments.
8.3 Investment of Earnings. Interest, dividends, if any, and other
distributions received by the Trustee with respect to an Investment Fund shall
be invested in such Investment Fund.
8.4 Transfer of Assets between Funds. A Participant may direct in
accordance with the provisions of this Section 8.4 and such procedures
established by the Committee that all of his interest in an Investment Fund or
Funds attributable to amounts in his Account (other than Employer Matching
Contributions) or any portion of such amount (expressed in number of shares,
whole dollar amounts, or one-percent (1%) increments) to the credit of his
Account be transferred and invested by the Trustee as of such date in any other
Investment Fund as designated by the Participant. Such direction shall be
effective as soon as practicable after it is made.
8.5 Change in Investment Direction. Any investment
direction given by a Participant shall continue in effect until
changed by the Participant. A Participant may change his
investment direction as to the future contributions and allocations
to his Account (other than Employer Matching Contributions) in
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accordance with the procedures established by the Committee, and such direction
shall be effective as soon as practicable after it is made.
8.6 Section 404(c) Plan. This Plan is intended to be a plan described
in ERISA Section 404(c) and shall be interpreted in accordance with Department
of Labor Regulations Section 1.404c-1, which is incorporated herein by this
reference. The Committee shall take such actions as it deems necessary or
appropriate in its discretion to cause the Plan to comply with such
requirements, including, but not limited to, providing Participants with the
right to request and receive written confirmation of their investment
instructions. Further, the Committee shall take such actions as it deems
necessary or appropriate in its discretion (a) to ensure that confidentiality
procedures with respect to a Participant's ownership of Common Stock and the
exercise of ownership rights with respect to such Common Stock are adequate and
utilized, and (b) to appoint an independent fiduciary to carry out such actions
as the Committee determines involve the potential for undue influence on
Participants with regard to the direct or indirect exercise of shareholder
rights with respect to Common Stock.
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ARTICLE IX
MAINTENANCE AND VALUATION OF PARTICIPANTS' ACCOUNTS
9.1 Establishment of Accounts.
(a) An Account shall be established for each Participant. In
addition, subaccounts shall be established for each Participant to
reflect all Elective Employer Contributions, Voluntary Participant
Contributions, Employer Matching Contributions and rollover
contributions from the SEPCO Plan (and the earnings and/or losses on
each subaccount). Each Participant will be furnished a statement of his
Account at least annually and upon any distribution.
(b) Effective as of January 1, 1993, the Committee shall
also establish a subaccount known as a Participant's SEPCO Transferred
Account to reflect the Participant's interest in the Plan resulting
from the merger of the SEPCO Plan into this Plan effective as of
January 1, 1993. To the extent that a Participant's Salary Deferral
Account, Employer Contribution Account, and Rollover Account (as those
terms were defined under the SEPCO Plan), were transferred to this Plan
from the SEPCO Plan, such accounts shall retain their character as
participant deferral, employer, or rollover contributions,
respectively, and the Committee shall establish and maintain such
bookkeeping accounts as it deems necessary to account for such
contributions, and any subsequent earnings or losses attributable
thereto, under this Plan.
9.2 Valuation of Investment Funds. A Participant's Account in respect
of his interest in each Investment Fund shall be credited or charged, as the
case may be, as of each Valuation Date with the dividends, income, gains,
appreciation, losses, depreciation, forfeitures, expenses, and other
transactions with respect to such Investment Fund for the Valuation Date as of
which such credit or charge accrued. Such credits or charges to a Participant's
Account shall be made in such proportions and by such method or formula as shall
be deemed by the Committee to be necessary or appropriate to account for each
Participant's proportionate beneficial interest in the Trust Fund in respect of
his interest in each Investment Fund. Investments of each Investment Fund shall
be valued at their fair market values as of each Valuation Date as determined by
the Trustee, and such valuation shall conclusively establish such value.
9.3 Rights in Investment Funds. Nothing contained in this
Article IX shall be deemed to give any Participant any interest in
any specific property in any Investment Fund or any interest, other
than the right to receive payments or distributions in accordance
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with the Plan or the right to instruct the Trustee how to vote Common Stock as
provided in Section 14.3.
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ARTICLE X
VESTING
10.1 Vesting. The amount to the credit of a Participant's
Account shall at all times be fully vested and nonforfeitable.
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ARTICLE XI
WITHDRAWALS AND LOANS PRIOR TO TERMINATION OF EMPLOYMENT
11.1 Withdrawals by Participants.
(a) Subject to the provisions of this Section 11.1 and
Sections 11.2 through 11.6, a Participant may make withdrawals from his
Account (other than amounts credited to his SEPCO Transferred Account)
during his employment with an Affiliated Employer effective as of any
Valuation Date in the order of priority listed below:
(1) All or a portion of the value of his Account
attributable to Voluntary Participant Contributions (not
including any earnings or appreciation thereon) made prior
to January 1, 1987;
(2) All amounts described above, plus all or a
portion of the value of his Account attributable to
Voluntary Participant Contributions, plus a ratable portion
of the earnings and/or appreciation on Voluntary
Participant Contributions;
(3) All amounts described above, plus up to fifty
percent (50%) of the value of his Account attributable to
Employer Matching Contributions (including earnings and
appreciation thereon) allocated to his Account; provided,
however, that said Participant shall have participated in
the Plan for not less than sixty (60) months at the time of
the withdrawal;
(4)(A) For Participants who have not attained age
59 1/2, all amounts described above, plus all or a portion
of the value of his Account attributable to Elective
Employer Contributions (not including any earnings or
appreciation thereon for Plan Years beginning after December
31, 1988); and
(B) For Participants who have attained age 59 1/2,
all amounts described above, plus all or a portion of the
value of his Account attributable to any earnings or
appreciation on Elective Employer Contributions.
(b) Withdrawals from a Participant's SEPCO Transferred
Account shall be made in accordance with Article XVIII.
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11.2 Notice of Withdrawal. Notice of withdrawal must be given by a
Participant in accordance with the procedures established by the Committee, and
if such withdrawal would constitute an eligible rollover distribution (within
the meaning of Code Section 402(c)(4)), the consent and notice requirements of
Section 12.10 must be satisfied. Payment of a withdrawal shall be made as soon
as practicable and in accordance with Section 12.10, if applicable.
11.3 Form of Withdrawal. All distributions under this Article XI shall
be made in the form of cash, provided that with respect to any distribution
which is attributable to Common Stock the Participant shall have the right to
demand that such portion of the distribution be made in the form of Common Stock
to the extent of the whole number of shares of Common Stock in his Account. Such
demand must be made in accordance with the procedures established by the
Committee.
11.4 Minimum Withdrawal. No distribution under this Article XI shall be
permitted in an amount which has a value of less than $300, unless the value of
the amount available under the selected option is less than $300, in which case
such available amount will be distributed.
11.5 Source of Withdrawal. Withdrawals shall be made in accordance with
the instructions of the Participant from each of the Investment Funds in which
the amount to be distributed is invested. The value of the amount to be
distributed under any option listed in Section 11.1 shall be determined as soon
as practicable in accordance with the procedures established by the Committee.
11.6 Requirement of Hardship.
(a) Except as provided in (e) below, a withdrawal pursuant
to Section 11.1(a)(4)(A), in addition to the other requirements of
Article XI, shall be permitted only if the Committee determines that
the withdrawal is to be made on account of an immediate and heavy
financial need of the Participant, the amount of the withdrawal does
not exceed such financial need, and the amount of the withdrawal is not
reasonably available from other resources of the Participant.
(b) For purposes of this Section 11.6, the following
shall be deemed to be immediate and heavy financial needs:
(1) medical expenses described in Section 213(d)
of the Code, including but not limited to, expenses for
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(i) the diagnosis, cure, mitigation, treatment, or
prevention of disease, or for the purpose of affecting any
structure or function of the body; (ii) transportation
primarily for and essential to such expenses referred to in
(i) above; or (iii) insurance (including amounts paid as
premiums under part B of Title XVIII of the Social Security
Act) relating to medical expenses referred to in (i) or (ii)
above, provided such expenses are incurred by the
Participant, the Participant's spouse or any person whom the
Participant may properly claim as a dependent on his federal
income tax return or are necessary for such persons to
obtain the medical care described above; or
(2) Purchase (excluding mortgage payments) of a
principal residence for the Participant; or
(3) payment of tuition, related educational fees,
and room and board expenses, for the next twelve (12) months
of post-secondary education for the Participant, the
Participant's spouse or child or children, or any person the
Participant may properly claim as a dependent on his federal
income tax return; or
(4) The need to prevent eviction of the
Participant from his principal residence or foreclosure
on the mortgage of the Participant's principal
residence; or
(5) Any other need which the Commissioner of the
Internal Revenue Service, through the publication of revenue
rulings, notices, or other documents of general
applicability, deems to be immediate and heavy.
(c) For purposes of this Section 11.6, a withdrawal shall be
deemed necessary to satisfy an immediate and heavy financial need if:
(1) the distribution is not in excess of the amount
of the immediate and heavy financial need of the
Participant, including any amounts necessary to pay any
federal, state, or local income taxes or penalties
reasonably anticipated to result from the distribution;
(2) The Participant has obtained all distributions
and all nontaxable loans currently available to him
under all plans maintained by an Affiliated Employer;
(3) The Participant agrees to suspend all elective
employer contributions and voluntary participant
contributions to all plans of an Affiliated Employer for
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at least twelve (12) months after receipt of the
distribution under this Section 11.6; and
(4) The Participant agrees not to make elective
contributions to this Plan or any other plan sponsored by an
Affiliated Employer during the Participant's taxable year
immediately following the taxable year of the hardship
distribution in excess of the Participant's applicable
elective deferral limits under Section 402(g) of the Code
for such taxable year less the amount for the taxable year
of the hardship distribution.
(d) When all suspensions pursuant to this Section 11.6 are
ended, Elective Employer Contributions and/or Voluntary Participant
Contributions may be resumed by the Participant (if the Participant is
then eligible and elects to resume such contributions) beginning with
the Participant's first payroll period commencing after all suspensions
are ended, and Employer Matching Contributions by his Employing Company
also shall be resumed. There shall be no make up of any contributions
by a Participant or by an Employing Company with respect to a period of
suspension.
(e) Notwithstanding (a) above, if a Participant has attained
age 59 1/2, he shall be permitted to make a withdrawal pursuant to
Section 11.1(a)(4)(B), even if such withdrawal is not on account of
hardship.
11.7 Loans to Participants.
(a) The Committee may, in its sole discretion, direct the
Trustee to make a loan or loans from the Trust Fund to any Participant
(other than a Participant with an existing Plan loan in arrears) (1)
who is an Employee on the active payroll of an Employing Company or is
a cooperative education employee, (2) who is receiving long-term
disability payments under a plan maintained by his Employing Company,
(3) who is on a leave of absence authorized by his Employing Company,
or (4) who is a party in interest as defined in Section 3(14) of ERISA.
All loan applications shall be made in accordance with the procedures
established by the Committee, which shall form a part of this Plan.
Such procedures shall establish the terms and conditions of loans under
the Plan, including the events constituting default, and shall be
consistent with the provisions of this Section 11.7.
(b) The total amount of all loans outstanding to any one
Participant under all qualified plans maintained by an Affiliated
Employer shall not exceed the lesser of (1) $50,000, reduced by the
excess of the highest outstanding balance of loans from all qualified
plans maintained by an
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Affiliated Employer during the twelve-month period ending on the day
before a loan is made, over the outstanding balance of any loans to the
Participant from all qualified plans maintained by an Affiliated
Employer on the date the loan is made, or (2) fifty percent (50%) of
such Participant's Account as of the Valuation Date coinciding with or
next following the date the loan application is made. The minimum
amount of any loan shall not equal less than $1,000.
(c) The Participant requesting a loan pursuant to this
Section 11.7 shall designate the order of priority of Investment
Fund(s) from which the principal amount of the loan shall be obtained.
(d) The Committee shall adopt and follow uniform and
nondiscriminatory procedures in making loans under this Plan to make
certain that such loans (1) are available to all Participants on a
reasonably equivalent basis, (2) are not made available to Highly
Compensated Employees, officers, or shareholders in an amount greater
than the amount made available to other Participants, (3) bear a
reasonable rate of interest, and (4) are adequately secured. The
repayment of such loans by any Participant who is an Employee on the
active payroll of an Employing Company shall be made through payroll
deduction. The minimum amount of any loan repayment shall not equal
less than $20.00, and such repayment shall extend for a period certain
of at least twelve (12) months (unless repaid in full), but not to
exceed fifty-eight (58) months, expressed in any number of whole months
(including the month the loan is made). The term of any loan may be for
a period certain of more than fifty-eight (58) months, but not to
exceed fifteen (15) years, only if the proceeds of such loan are used
to acquire any dwelling used or, within a reasonable period of time, to
be used as the principal residence of the Participant.
(e) The Committee shall direct the Trustee to obtain from
the Participant such note and adequate security as it may require. All
loans made pursuant to this Section 11.7 shall be secured by the
Participant's Account, and no other types of collateral may be used to
secure a loan from the Plan. Notwithstanding the provisions of Section
17.2, if a Participant defaults on a loan under the Plan or if the
Participant's employment terminates prior to full repayment thereof, in
addition to any other remedy provided in the loan instruments or by
law, the Committee may direct the Trustee to charge against that
portion of the Participant's Account which secures the loan the amount
required to fully repay the loan. Under no circumstances, however,
shall any unpaid loan be charged against a Participant's Account until
permitted by applicable law. This Section authorizes only the making of
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bona fide loans and not distributions, and before resort is made
against a Participant's Account for his failure to repay any loan, such
other reasonable efforts to collect the same shall be made by the
Committee as it deems reasonable and practical under the circumstances.
(f) No distribution shall be made to any Participant unless
and until all unpaid loans to such Participant have either been paid in
full or deducted from the Participant's Account.
(g) All loans made under this Section 11.7 shall be
considered earmarked investments of the Participant's Account, and any
repayment of principal and interest shall be reinvested in accordance
with the Participant's investment direction in effect on the date of
such repayment pursuant to Article VIII of the Plan.
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ARTICLE XII
DISTRIBUTION TO PARTICIPANTS
12.1 Distribution upon Retirement.
(a) Subject to the provisions of Article XVIII, if a
Participant's employment with the Affiliated Employers is terminated as
a result of his retirement pursuant to the defined benefit pension plan
of an Affiliated Employer, the entire balance credited to his Account
shall be payable to him in the manner set forth in this Section 12.1 at
such time requested by the Participant pursuant to Section 12.6 and in
accordance with the procedures established by the Committee. The
distribution shall commence as soon as practicable after the Valuation
Date selected by the Participant in one of the following ways:
(1) In a single lump sum distribution; or
(2) In annual installments not to exceed twenty
(20), as selected by the Participant, or the Participant's
life expectancy. The amount of cash and/or the number of
shares of Common Stock in each installment shall be equal to
the proportionate value as of each Valuation Date
immediately preceding payment of the balance then to the
credit of the Participant in his Account determined by
dividing the amount credited to his Account as of such
Valuation Date by the number of payments remaining to be
made.
If a Participant who is receiving installment payments shall
establish to the satisfaction of the Committee, in accordance with
principles and procedures established by the Committee which are
applicable to all persons similarly situated, that a financial
emergency exists in his affairs, such as illness or accident to the
Participant or a member of his immediate family or other similar
contingency, the Committee may, for the purpose of alleviating such
emergency, accelerate the time of payment of some or all of the
remaining installments. If a Participant dies before receiving all of
the amount to the credit of his Account in accordance with this
paragraph (2), the amount remaining to the credit of his Account at his
death shall be distributed to his Beneficiary as soon as practicable in
accordance with Section 12.4.
(b) Notwithstanding a Participant's election to defer the
receipt of the benefits under (a) above, the Committee shall direct
payment in a single lump sum to such Participant if the balance of his
Account does not exceed $3,500 in
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accordance with the requirements of Code Section 411(a)(11). The
Committee shall not cash-out any Participant whose Account balance
exceeds $3,500 without the written consent of the Participant.
12.2 Distribution upon Disability. If a Participant's employment with
the Affiliated Employers is terminated prior to his Normal Retirement Date by
reason of his total and permanent disability, as determined by the Social
Security Administration and evidenced in a writing provided to the Committee,
such disabled Participant shall be entitled to receive the entire value credited
to his Account at such time as requested by the Participant or such legal
representative pursuant to Section 12.6 and in accordance with the procedures
established by the Committee. Any distribution pursuant to this Section 12.2
shall be made in a single lump sum as soon as practicable after the selected
Valuation Date.
Notwithstanding the foregoing, the Committee shall direct payment in a
single lump sum to such Participant or his legal representative if the balance
of such Participant's Account does not exceed $3,500 in accordance with the
requirements of Code Section 411(a)(11).
12.3 Distribution upon Death. If a Participant's employment with the
Affiliated Employers is terminated by reason of death, the entire balance
credited to the Participant's Account shall be distributed as soon as
practicable to the Participant's surviving Beneficiary or Beneficiaries in a
lump sum.
12.4 Designation of Beneficiary in the Event of Death. A
Participant may designate a Beneficiary or Beneficiaries (who may
be designated contingently) to receive all or part of the amount
credited to his Account in case of his death before his receipt of
all of his benefits under the Plan, provided that the Beneficiary
of a married Participant shall be the Participant's Surviving
Spouse, unless such Surviving Spouse shall consent in a writing
witnessed by a notary public, which writing acknowledges the effect
of the Participant's designation of a Beneficiary other than such
Surviving Spouse. However, if such Participant establishes to the
satisfaction of the Committee that such written consent may not be
obtained because the Surviving Spouse cannot be located or because
of such other circumstances as the Secretary of the Treasury may by
regulations prescribe, a designation by such Participant without
the consent of the Surviving Spouse shall be valid.
Any consent necessary under this Section 12.4 shall be valid and
effective only with respect to the Surviving Spouse who signs the consent or, in
the event of a deemed consent, only with respect to a designated Surviving
Spouse.
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A designation of Beneficiary may be revoked by the Participant without
the consent of any Beneficiary (or the Participant's Surviving Spouse) at any
time before the commencement of the distribution of benefits. A Beneficiary
designation or change or revocation of a Beneficiary designation shall be made
in accordance with the procedures established by the Committee.
If no designated Beneficiary shall be living at the death of the
Participant and/or such Participant's Beneficiary designation is not valid and
enforceable under applicable law or the procedures of the Committee, such
Participant's Beneficiary of Beneficiaries shall be the person or persons in the
first of the following classes of successive preference, if then living:
(a) the Participant's spouse on the date of his death,
(b) the Participant's children, equally,
(c) the Participant's parents, equally,
(d) the Participant's brothers and sisters, equally, or
(e) the Participant's executors or administrators.
Payment to such one or more persons shall completely discharge the Plan and the
Trustee with respect to the amount so paid.
12.5 Distribution upon Termination of Employment.
(a) If a Participant's employment with the Affiliated
Employers is terminated for any reason other than in accordance with
Sections 12.1, 12.2, and 12.3, the balance to the credit of the
Participant's Account shall be distributed in a single lump sum. Such
distribution shall be made as soon as practicable after the
Participant's termination of employment, provided that one of the
following conditions is met:
(1) the Participant's Account Balance does not
exceed $3,500 in accordance with Code Section
411(a)(11), or
(2) in accordance with Section 12.10, the
Participant elects to receive a distribution of his
Account.
(b) A Participant who does not receive a distribution under
Section 12.5(a)(1) may elect to defer the commencement of the
distribution of his Account following the termination of his employment
until a later Valuation Date, provided that such distribution shall
commence not later than the date
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required under Section 12.6 of the Plan. Any deferred distribution
shall commence as soon as practicable after the Valuation Date selected
by the Participant.
12.6 Commencement of Benefits.
(a) Notwithstanding any other provision of the Plan, and
except as further provided in Section 12.6(b) below, if the Participant
does not elect to defer commencement of his benefit payments, the
payment of his benefits shall begin at the Participant's election no
later than the sixtieth (60th) day after the close of the Plan Year in
which the latest of the following events occurs:
(1) the Participant attains the earlier of age
sixty-five (65) or his Normal Retirement Date,
(2) the Participant's tenth (10th) anniversary of
participation under the Plan, or
(3) the Participant's separation from service with
the Affiliated Employers.
(b) In no event shall the distribution of amounts in a
Participant's Account commence later than the April 1 of the calendar
year following the calendar year in which the Participant attains age
70 1/2, in accordance with regulations prescribed by the Secretary of
the Treasury. The foregoing requirements in this Section 12.6(b) shall
not be applied to restrict the implementation of any written
designation given to the Committee by a Participant prior to January 1,
1984, with regard to the method of distribution of his Account, if such
method was permissible under the Plan and Code prior to January 1,
1984.
Any distribution made under this Plan shall be made in accordance with
the minimum distribution requirements of Code Section 401(a)(9), including the
incidental death benefits requirements under Code Section 401(a)(9)(G) and the
Treasury Regulations thereunder.
12.7 Transfer between Employing Companies. A transfer by a Participant
from one Employing Company to another Employing Company shall not affect his
participation in the Plan. A transfer by a Participant from an Employing Company
to an Affiliated Employer that is not an Employing Company shall not be deemed
to be a termination of employment with an Employing Company.
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12.8 Distributions to Alternate Payees. If the Participant's Account
under the Plan shall become subject to any domestic relations order which (a) is
a qualified domestic relations order satisfying the requirements of Section
414(p) of the Code and (b) requires the immediate distribution in a single lump
sum of the entire portion of the Participant's Account required to be segregated
for the benefit of an alternate payee, then the entire interest of such
alternate payee shall be distributed in a single lump sum within ninety (90)
days following the Employing Company's notification to the Participant and the
alternate payee that the domestic relations order is qualified under Section
414(p) of the Code, or as soon as practicable thereafter. Such distribution to
an alternate payee shall be made even if the Participant has not separated from
the service of the Affiliated Employers. Any other distribution pursuant to a
qualified domestic relations order shall not be made earlier than the
Participant's termination of service, or his attainment of age fifty (50), if
earlier, and shall not commence later than the date the Participant's (or his
Beneficiary's) benefit payments otherwise commence. Such distribution to an
alternate payee shall be made only in a manner permitted under Section 12.5 of
the Plan or Article XVIII with respect to his SEPCO Transferred Account.
12.9 Requirement for Direct Rollovers. Notwithstanding any provision of
the Plan to the contrary that would otherwise limit a Distributee's election
under this Article XII, a Distributee may elect, at the time and in the manner
prescribed by the Committee, to have any portion of an Eligible Rollover
Distribution paid directly to an Eligible Retirement Plan specified by the
Distributee in a Direct Rollover.
12.10 Consent and Notice Requirements. If the value of the vested
portion of a Participant's Account derived from Employing Company and Employee
contributions exceeds $3,500 determined in accordance with the requirements of
Code Section 411(a)(11), the Participant must consent to any distribution of
such vested account balance prior to his Normal Retirement Date. The consent of
the Participant shall be obtained within the ninety-day period ending on the
first day of the first period for which an amount is payable as an annuity or in
any other form under this Plan.
The Committee shall notify the Participant of the right to defer any
distribution until the Participant's Account balance is no longer immediately
distributable. Such notification shall include a general description of the
material features and an explanation of the relative values of the operational
forms of benefit available under the Plan in a manner that would satisfy the
notice requirements of Section 417(a)(3) of the Code; such notification shall be
provided no less than 30 days and no more than 90 days prior to the annuity
starting date.
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Distributions may commence less than 30 days after the notice required
under Section 1.411(a)-11(c) of the Treasury Regulations is given, provided
that:
(a) the Committee informs the Participant that the
Participant has a right to a period of at least 30
days after receiving the notice to consider the
decision of whether or not to elect a distribution
and a particular distribution option, and
(b) the Participant, after receiving the notice,
affirmatively elects a distribution.
12.11 Form of Payment. All distributions under this Article XII shall
be made in the form of cash, provided that the person entitled to such
distribution may demand that the portion of any distribution which is
attributable to Common Stock be distributed in the form of Common Stock to the
extent of the whole number of shares in the Participant's Account, with a cash
adjustment for any fractional shares.
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ARTICLE XIII
ADMINISTRATION OF THE PLAN
13.1 Membership of Committee. The Plan shall be administered by the
Committee, which shall consist of the representative of The Southern Company and
the representative of each Employing Company on The Southern Company Human
Resources Committee, except Southern Electric International, Inc. The Committee
shall be chaired by the representative of The Southern Company and may select a
Secretary (who may, but need not, be a member of the Committee) to keep its
records or to assist it in the discharge of its duties.
13.2 Acceptance and Resignation. Any person appointed to be a member of
the Committee shall signify his acceptance in writing to the Chairman of the
Committee. Any member of the Committee may resign by delivering his written
resignation to the Committee and such resignation shall become effective upon
delivery or upon any later date specified therein.
13.3 Transaction of Business. A majority of the members of the
Committee at the time in office shall constitute a quorum for the transaction of
business at any meeting. Any determination or action of the Committee may be
made or taken by a majority of the members present at any meeting thereof or
without a meeting by a resolution or written memorandum concurred in by a
majority of the members then in office.
13.4 Responsibilities in General. The Committee shall administer the
Plan and shall have the discretionary authority, power, and the duty to take all
actions and to make all decisions necessary or proper to carry out the Plan and
to control and manage the operation and administration of the Plan. The
Committee shall have the discretion to interpret the Plan, including any
ambiguities herein, and to determine the eligibility for benefits under the Plan
in its sole discretion. The determination of the Committee as to any question
involving the general administration and interpretation of the Plan shall be
final, conclusive, and binding on all persons, except as otherwise provided
herein or by law, and may be relied upon by the Company, all Employing
Companies, the Trustee, the Participants, and their Beneficiaries. Any
discretionary action to be taken under the Plan by the Committee with respect to
Employees and Participants or with respect to benefits shall be uniform in their
nature and applicable to all persons similarly situated.
13.5 Committee as Named Fiduciary. For the purpose of
compliance with the provisions of ERISA, the Committee shall be
deemed the administrator of the Plan as the term "administrator" is
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defined in ERISA, and the Committee shall be, with respect to the Plan, a named
fiduciary as that term is defined in ERISA. For the purpose of carrying out its
duties, the Committee may, in its discretion, allocate its responsibilities
under the Plan among its members and may, in its discretion, designate persons
(in writing or otherwise) other than members of the Committee to carry out such
responsibilities of the Committee under the Plan as it may see fit.
13.6 Rules for Plan Administration. The Committee may make and enforce
rules and regulations for the administration of the Plan consistent with the
provisions thereof and may prescribe the use of such forms or procedures as it
shall deem appropriate for the administration of the Plan.
13.7 Employment of Agents. The Committee may employ independent
qualified public accountants, as such term is defined in ERISA, who may be
accountants to The Southern Company and any Affiliated Employer, legal counsel
who may be counsel to The Southern Company and any Affiliated Employer, other
specialists, and other persons as the Committee deems necessary or desirable in
connection with the administration of the Plan. The Committee and any person to
whom it may delegate any duty or power in connection with the administration of
the Plan, the Company and the officers and directors thereof shall be entitled
to rely conclusively upon and shall be fully protected in any action omitted,
taken, or suffered by them in good faith in reliance upon any independent
qualified public accountant, counsel, or other specialist, or other person
selected by the Committee, or in reliance upon any tables, evaluations,
certificates, opinions, or reports which shall be furnished by any of them or by
the Trustee.
13.8 Co-Fiduciaries. It is intended that to the maximum extent
permitted by ERISA, each person who is a fiduciary (as that term is defined in
ERISA) with respect to the Plan shall be responsible for the proper exercise of
his own powers, duties, responsibilities, and obligations under the Plan and the
Trust, as shall each person designated by any fiduciary to carry out any
fiduciary responsibilities with respect to the Plan or the Trust. No fiduciary
or other person to whom fiduciary responsibilities are allocated shall be liable
for any act or omission of any other fiduciary or of any other person delegated
to carry out any fiduciary or other responsibility under the Plan or the Trust.
13.9 General Records. The Committee shall maintain or cause
to be maintained an Account (and any separate subaccount) which
accurately reflects the interest of each Participant, as provided
for in Section 9.1, and shall maintain or cause to be maintained
all necessary books of account and records with respect to the
administration of the Plan. The Committee shall mail or cause to
be mailed to Participants reports to be furnished to Participants
in accordance with the Plan or as may be required by ERISA. Any
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notices, reports, or statements to be given, furnished, made, or delivered to a
Participant shall be deemed duly given, furnished, made, or delivered when
addressed to the Participant and delivered to the Participant in person or
mailed by ordinary mail to his address last communicated to the Committee (or
its delegate) or of his Employing Company.
13.10 Liability of the Committee. In administering the Plan, except as
may be prohibited by ERISA, neither the Committee nor any person to whom it may
delegate any duty or power in connection with administering the Plan shall be
liable for any action or failure to act except for its or his own gross
negligence or willful misconduct; nor for the payment of any amount under the
Plan; nor for any mistake of judgment made by him or on his behalf as a member
of the Committee; nor for any action, failure to act, or loss unless resulting
from his own gross negligence or willful misconduct; nor for the neglect,
omission, or wrongdoing of any other member of the Committee. No member of the
Committee shall be personally liable under any contract, agreement, bond, or
other instrument made or executed by him or on his behalf as a member of the
Committee.
13.11 Reimbursement of Expenses and Compensation of Committee. Members
of the Committee shall be reimbursed by the Company for expenses they may
individually or collectively incur in the performance of their duties. Each
member of the Committee who is a full-time employee of the Company or of any
Employing Company shall serve without compensation for his services as such
member; each other member of the Committee shall receive such compensation, if
any, for his services as the Board of Directors may fix from time to time.
13.12 Expenses of Plan and Trust Fund. The expenses of establishment
and administration of the Plan and the Trust Fund, including all fees of the
Trustee, auditors, and counsel, shall be paid by the Company or the Employing
Companies. Notwithstanding the foregoing, certain administrative expenses may be
paid from the Trust Fund unless otherwise paid by the Company or the Employing
Companies to the extent provided in the Trust Agreement. Any expenses directly
related to the investments of the Trust Fund, such as stock transfer taxes,
brokerage commissions, or other charges incurred in the acquisition or
disposition of such investments, shall be paid from the Trust Fund (or from the
particular Investment Fund to which such fees or expenses relate) and shall be
deemed to be part of the cost of such securities or deducted in computing the
proceeds therefrom, as the case may be. Investment management fees for the
Investment Funds shall be paid from the particular Investment Fund to which they
relate unless otherwise paid by the Company or the Employing Companies. Taxes,
if any, on any assets held or income received by the Trustee and transfer taxes
on the transfer of Common Stock from the Trustee to
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a Participant or his Beneficiary shall be charged appropriately against the
Accounts of Participants as the Committee shall determine. Any expenses paid by
the Company pursuant to Section 13.11 and this section shall be subject to
reimbursement by other Employing Companies of their proportionate shares of such
expenses as determined by the Committee.
13.13 Responsibility for Funding Policy. The Pension Fund Investment
Review Committee of The Southern Company System shall have responsibility for
providing a procedure for establishing and carrying out a funding policy and
method for the Plan consistent with the objectives of the Plan and the
requirements of Title I of
ERISA.
13.14 Management of Assets. The Committee shall not have responsibility
with respect to the control or management of the assets of the Plan. The Trustee
shall have the sole responsibility for the administration of the assets of the
Plan as provided in the Trust Agreement, except to the extent that an investment
advisor (who qualifies as an Investment Manager as that term is defined in
ERISA) who may be appointed by the Board of Directors (upon recommendation by
the Pension Fund Investment Review Committee on and after August 5, 1993) shall
have responsibility for the management of the assets of the Plan, or some part
thereof (including the powers to acquire and dispose of the assets of the Plan,
or some part thereof).
13.15 Notice and Claims Procedures. Consistent with the
requirements of ERISA and the regulations thereunder of the
Secretary of Labor from time to time in effect, the Committee
shall:
(a) provide adequate notice in writing to any Participant or
Beneficiary whose claim for benefits under the Plan has been denied,
setting forth specific reasons for such denial, written in a manner
calculated to be understood by such Participant or Beneficiary, and
(b) afford a reasonable opportunity to any Participant or
Beneficiary whose claim for benefits has been denied for a full and
fair review of the decision denying the claim.
13.16 Bonding. Unless otherwise determined by the Board of Directors or
required by law, no member of the Committee shall be required to give any bond
or other security in any jurisdiction.
13.17 Multiple Fiduciary Capacities. Any person or group of
persons may serve in more than one fiduciary capacity with respect
to the Plan, and any fiduciary with respect to the Plan may serve
as a fiduciary with respect to the Plan in addition to being an
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officer, employee, agent, or other representative of a party in interest, as
that term is defined in ERISA.
13.18 Change in Administrative Procedures. Notwithstanding any
provision in the Plan to the contrary, the Committee shall be authorized to take
whatever actions it deems necessary or appropriate in its discretion to
implement administrative procedures, including, but not limited to, suspending
plan participation (to the extent permitted by applicable law,) and suspending
changes in investment directions and fund transfers, even though otherwise
permitted or required under the Plan.
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ARTICLE XIV
TRUSTEE OF THE PLAN
14.1 Trustee. The Company has entered into a Trust Agreement with the
Trustee to hold the funds necessary to provide the benefits set forth in the
Plan. If the Board of Directors so determines, the Company may enter into a
Trust Agreement or Trust Agreements with additional trustees. Any Trust
Agreement may be amended by the Company from time to time in accordance with its
terms. Any Trust Agreement shall provide, among other things, that all funds
received by the Trustee thereunder will be held, administered, invested, and
distributed by the Trustee, and that no part of the corpus or income of the
Trust held by the Trustee shall be used for or diverted to purposes other than
for the exclusive benefit of Participants or their Beneficiaries, except as
otherwise provided in the Plan. Any Trust Agreement may also provide that the
investment and reinvestment of the Trust Fund, or any part thereof may be
carried out in accordance with directions given to the Trustee by any Investment
Manager or Investment Managers (as that term is defined in ERISA) who may be
appointed by the Board of Directors (upon recommendation by the Pension Fund
Investment Review Committee). The Board of Directors may remove any Trustee or
any successor Trustee, and any Trustee or any successor Trustee may resign. Upon
removal or resignation of a Trustee, the Board of Directors shall appoint a
successor Trustee.
14.2 Purchase of Common Stock. As soon as practicable after receipt of
funds applicable to the purchase of Common Stock, the Trustee shall purchase
Common Stock or cause Common Stock to be purchased. Such Common Stock may be
purchased on the open market or by private purchase (including private purchases
directly from The Southern Company); provided that (a) no private purchase may
be made at any price greater than the last sale price or highest current
independent bid price, whichever is higher, for Common Stock on the New York
Stock Exchange, plus an amount equal to the commission payable in a stock
exchange transaction; (b) if such private purchase shall be a purchase of Common
Stock directly from The Southern Company, no commission shall be paid with
respect thereto; and (c) the Trustee may purchase Common Stock directly from The
Southern Company under the Dividend Reinvestment and Stock Purchase Plan of The
Southern Company, as from time to time amended, or under any other similar plan
made available to holders of record of shares of Common Stock which may be in
effect from time to time, at the purchase price provided for in such plan. The
Trustee may hold in cash, and may temporarily invest in short-term United States
obligations, commercial paper, or certificates of deposit, funds applicable to
the purchase of Common Stock pending investment of such funds in such Common
Stock.
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14.3 Voting of Common Stock. Before each annual or special meeting of
shareholders of The Southern Company, there shall be sent to each Participant a
copy of the proxy soliciting material for the meeting, together with a form
requesting instructions to the Trustee on how to vote the shares of Common Stock
credited to such Participant's Account at the end of the month immediately
preceding the record date of the Common Stock. If a Participant does not provide
the Trustee or its designated agent with timely voting instructions for the
Trustee, the Pension Fund Investment Review Committee of The Southern Company
System or its delegate may direct the Trustee how to vote such Participant's
shares. If the Pension Fund Investment Review Committee of The Southern Company
System or its delegate does not provide the Trustee or its designated agent with
timely voting instructions, the Trustee, if required to do so by applicable law,
may vote such Participant's shares. The Pension Fund Investment Review Committee
of The Southern Company System or its delegate may direct the Trustee with
respect to voting unallocated shares of Common Stock, if any. If the Pension
Fund Investment Review Committee of The Southern Company System or its delegate
does not provide the Trustee or its designated agent with timely voting
instructions, the Trustee, if required to do so by applicable law, may vote such
unallocated shares.
14.4 Voting of Other Investment Fund Shares. The Pension Fund
Investment Review Committee or its delegate may direct the Trustee with respect
to voting the shares in any Investment Fund other than the Company Stock Fund.
To the extent an Investment Manager has been designated with respect to an
Investment Fund, such Investment Manager (and not the Pension Fund Investment
Review Committee) shall direct the Trustee with respect to voting the shares in
such Investment Fund. If the Investment Manager does not direct the Trustee with
respect to voting such shares, the Pension Fund Investment Review Committee may
direct the Trustee with respect to voting such shares. If the Pension Fund
Investment Review Committee does not provide the Trustee or its designated agent
with timely voting instructions, the Trustee, if required to do so by applicable
law, may vote such shares.
14.5 Uninvested Amounts. The Trustee may keep uninvested an
amount of cash sufficient in its opinion to enable it to carry out
the purposes of the Plan.
14.6 Independent Accounting. The Board of Directors shall
select a firm of independent public accountants to examine and
report annually on the financial position and the results of
operation of the Trust forming a part of the Plan.
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ARTICLE XV
AMENDMENT AND TERMINATION OF THE PLAN
15.1 Amendment of the Plan. The Plan may be amended or modified by the
Board of Directors pursuant to its written resolutions at any time and from time
to time; provided, however, that no such amendment or modification shall make it
possible for any part of the corpus or income of the Trust Fund to be used for
or diverted to purposes other than for the exclusive benefit of Participants or
their Beneficiaries under the Plan, including such part as is required to pay
taxes and administration expenses of the Plan. The Plan may also be amended or
modified by the Committee (a) if such amendment or modification does not involve
a substantial increase in cost to any Employing Company, or (b) as may be
necessary, proper, or desirable in order to comply with laws or regulations
enacted or promulgated by any federal or state governmental authority and to
maintain the qualification of the Plan under Sections 401(a) and 501(a) of the
Code and the applicable provisions of ERISA.
No amendment to the Plan shall have the effect of decreasing a
Participant's vested interest in his Account, determined without regard to such
amendment, as of the later of the date such amendment is adopted or the date it
becomes effective. In addition, if the vesting schedule of the Plan is amended,
any Participant who has completed at least three (3) Years of Service and whose
vested interest is at any time adversely affected by such amendment may elect to
have his vested interest determined without regard to such amendment during the
election period defined under Section 411(a)(10) of the Code. Finally, no
amendment shall eliminate an optional form of benefit in violation of Code
Section 411(d)(6).
15.2 Termination of the Plan. It is the intention of the Employing
Companies to continue the Plan indefinitely. However, the Board of Directors
pursuant to its written resolutions may at any time and for any reason suspend
or terminate the Plan or suspend or discontinue the making of contributions of
all Participants and of contributions by all Employing Companies. Any Employing
Company may, by action of its board of directors and approval of the Board of
Directors, suspend or terminate the making of contributions of Participants in
the employ of such Employing Company and of contributions by such Employing
Company.
In the event of termination of the Plan or partial termination or upon
complete discontinuance of contributions under the Plan by all Employing
Companies or by any one Employing Company, the amount to the credit of the
Account of each Participant whose Employing Company shall be affected by such
termination or discontinuance
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shall be determined as of the next Valuation Date and shall be distributed to
him or his Beneficiary thereafter at such time or times and in such
nondiscriminatory manner as is determined by the Committee in compliance with
the restrictions on distributions set forth in Code Section 401(k).
15.3 Merger or Consolidation of the Plan. The Plan shall not be merged
or consolidated with nor shall any assets or liabilities thereof be transferred
to any other plan unless each Participant of the Plan would (if the Plan then
terminated) receive a benefit immediately after the merger, consolidation, or
transfer which is equal to or greater than the benefit he would have been
entitled to receive immediately prior to the merger, consolidation, or transfer
(if the Plan had then terminated).
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ARTICLE XVI
TOP-HEAVY REQUIREMENTS
16.1 Top-Heavy Plan Requirements. For any Plan Year the Plan
shall be determined to be a top-heavy plan, the Plan shall provide
the minimum allocation requirement of Section 16.3.
16.2 Determination of Top-Heavy Status.
(a) For any Plan Year commencing after December 31, 1983,
the Plan shall be determined to be a top-heavy plan, if, as of the
Determination Date, the sum of the Aggregate Accounts of Key Employees
under this Plan exceeds 60% of the Aggregate Accounts of all Employees
entitled to participate in this Plan.
(b) For any Plan Year commencing after December 31, 1983,
the Plan shall be determined to be a super-top-heavy plan, if, as of
the Determination Date, the sum of the Aggregate Accounts of Key
Employees under this Plan exceeds 90% of the Aggregate Accounts of all
Employees entitled to participate in this Plan.
(c) In the case of a Required Aggregation Group, each plan
in the group will be considered a top-heavy plan if the Required
Aggregation Group is a Top-Heavy Group. No plan in the Required
Aggregation Group will be considered a top-heavy plan if the
Aggregation Group is not a Top-Heavy Group.
In the case of a Permissive Aggregation Group, only a plan
that is part of the Required Aggregation Group will be considered a
top-heavy plan if the Permissive Aggregation Group is a Top-Heavy
Group. A plan that is not part of the Required Aggregation Group but
that has nonetheless been aggregated as part of the Permissive
Aggregation Group will not be considered a top-heavy plan even if the
Permissive Aggregation Group is a Top-Heavy Group.
(d) For purposes of this Article XVI, if any Employee is a
non-Key Employee for any Plan Year, but such Employee was a Key
Employee for any prior Plan Year, such Employee's Present Value of
Accrued Retirement Income and/or Aggregate Account balance shall not be
taken into account for purposes of determining whether this Plan is a
top-heavy or super-top- heavy plan (or whether any Aggregation Group
which includes this Plan is a Top-Heavy Group). In addition, for Plan
Years beginning after December 31, 1984, if an Employee or former
Employee has not performed any services for any Employing Company
maintaining the Plan at any time during the five-year
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period ending on the Determination Date, the Aggregate Account and/or
Present Value of Accrued Retirement Income shall be excluded in
determining whether this Plan is a top-heavy or super-top-heavy plan.
(e) Only those plans of the Affiliated Employers in which
the Determination Dates fall within the same calendar year shall be
aggregated in order to determine whether such plans are top-heavy
plans.
16.3 Minimum Allocation for Top-Heavy Plan Years.
(a) Notwithstanding anything herein to the contrary, for any
top-heavy Plan Year, the Employing Company contribution allocated to
the Account of each non-Key Employee shall be an amount not less than
the lesser of: (1) 3% of such Participant's compensation for that Plan
Year, or (2) a percentage of that Participant's compensation not to
exceed the percentage at which contributions are made under the Plan
for the Key Employee for whom such percentage is highest for that Plan
Year.
(b) For purposes of the minimum allocation of Section
16.3(a), the percentage allocated to the Account of any Key Employee
shall be equal to the ratio of the Employing Company contributions
allocated on behalf of such Key Employee divided by the compensation of
such Key Employee for that Plan Year.
(c) For any top-heavy Plan Year, the minimum allocations of
Section 16.3(a) shall be allocated to the Accounts of all non-Key
Employees who are Participants and who are employed by the Affiliated
Employers on the last day of the Plan Year.
(d) Notwithstanding the foregoing, in any Plan Year in which
a non-Key Employee is a Participant in both this Plan and a defined
benefit plan, and both such plans are top-heavy plans, the Affiliated
Employers shall not be required to provide a non-Key Employee with both
the full separate minimum defined benefit and the full separate defined
contribution plan allocations. Therefore, if a non-Key Employee is
participating in a defined benefit plan maintained by the Affiliated
Employers and the minimum benefit under Code Section 416(c)(1) is
provided the non-Key Employee under such defined benefit plan, the
minimum allocation provided for above shall not be applicable, and no
minimum allocation shall be made on behalf of the non-Key Employee.
Alternatively, the Employing Company may satisfy the minimum allocation
requirement of Code Section 416(c)(2) for the non-Key Employee by
providing any combination of benefits and/or contributions
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that satisfy the safe harbor rules of Treasury Regulation
Section 1.416-1(M-12).
16.4 Adjustments to Maximum Benefit Limits for Top-Heavy
Plans.
(a) In the case of an Employee who is a participant in a
defined benefit plan and a defined contribution plan maintained by the
Affiliated Employers, and such plans as a group are determined to be
top heavy for any limitation year beginning after December 31, 1983,
"1.0", shall be substituted for "1.25" in each place it appears in the
denominators of the Defined Benefit Plan Fraction and Defined
Contribution Plan Fraction, unless the extra minimum benefit is
provided pursuant to Section 16.4(b) below. Super-top-heavy plans and
plans in a Super-Top-Heavy Group shall be required at all times to
substitute "1.0" for "1.25" in the denominator of each plan fraction.
(b) If a Key Employee is a participant in both a defined
benefit plan and a defined contribution plan that are both part of a
Top-Heavy Group (but neither of such plans is a super-top-heavy plan),
the Defined Benefit Plan Fraction and the Defined Contribution Plan
Fraction shall remain unchanged, provided the Account of each non-Key
Employee who is a Participant receives an extra allocation (in addition
to the minimum allocation in Section 16.3(a)) equal to not less than 1%
of such non-Key Employee's compensation.
(c) For purposes of this Section 16.4, if the sum of the
Defined Benefit Plan Fraction and the Defined Contribution Plan
Fraction shall exceed 1.0 in any Plan Year for any Participant in this
Plan, the Affiliated Employers shall eliminate any amounts in excess of
the limits set forth in Section 6.1(b), pursuant to Section 6.3 of the
Plan.
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ARTICLE XVII
GENERAL PROVISIONS
17.1 Plan Not an Employment Contract. The Plan shall not be deemed to
constitute a contract between an Affiliated Employer and any Employee, nor shall
anything herein contained be deemed to give any Employee any right to be
retained in the employ of an Employing Company or to interfere with the right of
an Employing Company to discharge any Employee at any time and to treat him
without regard to the effect which such treatment might have upon him as a
Participant.
17.2 No Right of Assignment or Alienation. Except as may be otherwise
permitted or required by law, no right or interest in the Plan of any
Participant or Beneficiary and no distribution or payment under the Plan to any
Participant or Beneficiary shall be subject in any manner to anticipation,
alienation, sale, transfer (except by death), assignment (either at law or in
equity), pledge, encumbrance, charge, attachment, garnishment, levy, execution,
or other legal or equitable process, whether voluntary or involuntary, and any
attempt to so anticipate, alienate, sell, transfer, assign, pledge, encumber,
charge, attach, garnish, levy, or execute or enforce any other legal or
equitable process against the same shall be void, nor shall any such right,
interest, distribution, or payment be in any way liable for or subject to the
debts, contracts, liabilities, engagements, or torts of any person entitled to
such right, interest, distribution, or payment. If any Participant or
Beneficiary is adjudicated bankrupt or purports to anticipate, alienate, sell,
transfer, assign, pledge, encumber, or charge any such right, interest,
distribution, or payment, voluntarily or involuntarily, or if any action shall
be taken which is in violation of the provisions of the immediately preceding
sentence, the Committee may hold or apply or cause to be held or applied such
right, interest, distribution, or payment or any part thereof to or for the
benefit of such Participant or Beneficiary in such manner as is in accordance
with applicable law.
Notwithstanding the above, the Committee and the Trustee shall comply
with any domestic relations order (as defined in Section 414(p)(1)(B) of the
Code) which is a qualified domestic relations order satisfying the requirements
of Section 414(p) of the Code. The Committee shall establish procedures for (a)
notifying Participants and alternate payees who have or may have an interest in
benefits which are the subject of domestic relations orders, (b) determining
whether such domestic relations orders are qualified domestic relations orders
under Section 414(p) of the Code, and (c) distributing benefits which are
subject to qualified domestic relations orders.
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17.3 Payment to Minors and Others. If the Committee determines that any
person entitled to a distribution or payment from the Trust Fund is an infant or
incompetent or is unable to care for his affairs by reason of physical or mental
disability, it may cause all distributions or payments thereafter becoming due
to such person to be made to any other person for his benefit, without
responsibility to follow the application of payments so made. Payments made
pursuant to this provision shall completely discharge the Company, the Trustee,
and the Committee with respect to the amounts so paid. No person shall have any
rights under the Plan with respect to the Trust Fund, or against the Trustee or
any Employing Company, except as specifically provided herein.
17.4 Source of Benefits. The Trust Fund established under the Plan
shall be the sole source of the payments or distributions to be made in
accordance with the Plan. No person shall have any rights under the Plan with
respect to the Trust Fund, or against the Trustee or any Employing Company,
except as specifically provided herein.
17.5 Unclaimed Benefits. If the Committee is unable, within five (5)
years after any distribution becomes payable to a Participant or Beneficiary, to
make or direct payment to the person entitled thereto because the identity or
whereabouts of such person cannot be ascertained, notwithstanding the mailing of
due notice to such person at his last known address as indicated by the records
of either the Committee or his Employing Company, then such benefit or
distribution will be disposed of as follows:
(a) If the whereabouts of the Participant is unknown to
the Committee, distribution will be made to the Participant's
Beneficiary or Beneficiaries.
Payment to such one or more persons shall completely
discharge the Company, the Trustee, and the Committee with respect to
the amounts so paid.
(b) If none of the persons described in (a) above, can be
located, then the benefit payable under the Plan shall be forfeited and
shall be applied to reduce future Employer Matching Contributions.
Notwithstanding the foregoing sentence, such benefit shall be
reinstated if a claim is made by the Participant or Beneficiary for the
forfeited benefit.
17.6 Governing Law. The provisions of the Plan and the Trust shall be
construed, administered, and enforced in accordance with the laws of the State
of Georgia, except to the extent such laws are preempted by the laws of the
United States.
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ARTICLE XVIII
SPECIAL REQUIREMENTS FOR ACCOUNT BALANCES
ATTRIBUTABLE TO ACCRUED BENEFITS
TRANSFERRED FROM THE SEPCO PLAN
18.1 SEPCO Transferred Accounts. Notwithstanding any other provisions
of this Plan to the contrary, a Participant's SEPCO Transferred Account shall be
subject to the requirements of this Article XVIII.
18.2 In-Service Withdrawals from SEPCO Transferred Accounts. Except as
provided in this Section 18.2, a Participant shall be entitled to a distribution
of his SEPCO Transferred Account at the same time he is entitled to a
distribution of his Account under the applicable provisions of Article XII.
(a) Age 59 1/2. A Participant who has attained age 59 1/2
shall have the right to withdraw all or a portion of his SEPCO
Transferred Account in accordance with Section 11.6(e) provided that he
shall have first withdrawn all other amounts available to him in
accordance with the terms and order of priority set forth in Section
11.1.
(b) Hardship. A Participant who meets the requirements for
hardship set forth in Section 11.6 hereof shall be entitled to withdraw
amounts determined necessary to relieve such hardship from his SEPCO
Transferred Account, provided that he shall have first withdrawn all
other amounts available to him in accordance with the terms and order
of priority set forth in Section 11.1.
18.3 Loans from SEPCO Transferred Accounts. Subject to the provisions
of Section 11.7, a Participant may request that a loan be made to him from his
SEPCO Transferred Account, provided, however, that the Participant has first
borrowed all other amounts available to him under the terms of the Plan in the
order of priority set forth in Section 11.7(c).
A Participant must obtain the consent of his or her spouse, if any, to
use any portion of his SEPCO Transferred Account as security for a loan. Within
the ninety-day period ending on the date on which a loan is made to a
Participant who is married, the Participant shall obtain and deliver to the
Committee the written consent of the Participant's spouse (1) to the loan, and
(2) to the reduction of the Participant's Account if the Participant's Account
is reduced because of nonpayment or other default with respect to the loan. No
further spousal consent shall be required in the event the Participant's Account
is subsequently reduced with
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respect to such loan, even if the Participant is then married to a different
spouse. A new spousal consent shall be required for any subsequent loan to a
Participant, if the Participant is then married.
18.4 Distribution of SEPCO Transferred Accounts. Notwithstanding any
provisions of this Plan to the contrary, a Participant with a SEPCO Transferred
Account shall be paid the vested benefits of the SEPCO Transferred Account upon
retirement, death, total and permanent disability, or termination of employment
as provided herein.
(a) All benefits from a Participant's SEPCO Transferred
Account shall be distributed in accordance with the distribution
options available under Article XII, with applicable spousal consent as
provided under the SEPCO Plan, unless a Participant elects payment of
benefits in the form of a life annuity pursuant to a written election
filed with the Committee prior to commencement of distribution of
benefits. The provisions of this Section 18.4 shall take precedence
over any conflicting provisions of the Plan and shall apply to any
Participant who has a SEPCO Transferred Account and who elects to
receive payment of his benefits from his SEPCO Transferred Account in
the form of a life annuity. A married Participant electing to receive
benefits in the form of a life annuity shall receive the value of his
benefit in the form of a qualified joint and survivor annuity, which
shall provide an annuity for the life of the Participant with a
survivor annuity for the life of the Participant's spouse which is
either 50% or 100%, as elected by the Participant, of the amount of the
annuity which is payable during the joint lives of the Participant and
the Participant's spouse, and which is the actuarial equivalent of a
single life annuity for the life of the Participant. An unmarried
Participant who elects a life annuity shall receive the value of his
benefits from his SEPCO Transferred Account in the form of an annuity
for his lifetime.
(b) If the Participant's interest is to be distributed in
other than a single sum, the amount required to be distributed for each
calendar year, beginning with distributions for the first Distribution
Calendar Year, must at least equal the quotient obtained by dividing
the Participant's Benefit by the Applicable Life Expectancy.
(c) The minimum distribution required for the
Participant's first Distribution Calendar Year must be
made on or before the Participant's Required Beginning
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<PAGE>
Date. The minimum distribution for other calendar years, including the
minimum distribution for the Distribution Calendar Year in which the
Participant's Required Beginning Date occurs, must be made on or before
December 31 of that Distribution Calendar Year.
(d) If the Participant's benefit is distributed in the form
of an annuity purchased from an insurance company, distributions
thereunder shall be made in accordance with the requirements of Section
401(a)(9) of the Code and the proposed regulations thereunder.
(e) Definitions.
(1) "Applicable Life Expectancy" means the life
expectancy calculated using the attained age of the
Participant as of the Participant's birthday in the
applicable calendar year reduced by one for each calendar
year which has elapsed since the date life expectancy was
first calculated. If life expectancy is being recalculated,
the applicable life expectancy shall be the life expectancy
as so recalculated. The applicable calendar year shall be
the first Distribution Calendar Year, and if life expectancy
is being recalculated such succeeding calendar year.
(2) "Distribution Calendar Year" means a calendar
year for which a minimum distribution is required. For
distributions beginning before the Participant's death, the
first Distribution Calendar Year is the calendar year
immediately preceding the calendar year which contains the
Participant's Required Beginning Date.
(3) "Participant's Benefit" means the account
balance as of the last valuation date in the calendar year
immediately preceding the Distribution Calendar Year
(valuation calendar year) increased by the amount of any
contributions or forfeitures allocated to the account
balance as of dates in the valuation calendar year after the
valuation date and decreased by distributions made in the
valuation calendar year after the valuation date. If any
portion of the minimum distribution for the first
Distribution Calendar Year is made in the second
Distribution Calendar Year on or before the Required
Beginning Date, the amount of the minimum distribution made
in the second Distribution Calendar Year shall be treated as
if it had been made in the immediately preceding
Distribution Calendar Year.
(4) "Required Beginning Date" means April 1st of
the calendar year following the calendar year in which
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<PAGE>
the Participant attains age 70-1/2, in accordance with
regulations prescribed by the Secretary of the Treasury.
(f) Notwithstanding anything contained herein to the
contrary, the requirements of this Section shall apply to any
distribution of a Participant's interest and will take precedence over
any inconsistent provisions of this Plan. All distributions required
under this Section shall be determined and made in accordance with the
proposed regulations under Section 401(a)(9), including the minimum
distribution incidental benefit requirement of Section 1.401(a)(9)-2 of
the proposed regulations.
18.5 Code Section 411(d)(6) Protected Benefits. Notwithstanding any of
the foregoing, the provisions of this Article XVIII to effectuate the merger of
the SEPCO Plan into this Plan shall not decrease a Participant's accrued
benefit, except to the extent permitted under Section 412(c)(8) of the Code, and
shall not reduce or eliminate Code Section 411(d)(6) protected benefits
determined immediately prior to the date of such merger. The Committee shall
disregard any part of this Article XVIII or the Plan to the extent that
application of such would fail to satisfy this paragraph. If the Committee
disregards any portion of this Article XVIII or the Plan because it would
eliminate a protected benefit, the Committee shall maintain a schedule of any
such impacted early retirement option or other optional forms of benefit and the
Plan shall continue such for the affected Participants.
IN WITNESS WHEREOF, the Company has caused this amendment and
restatement of The Southern Company Employee Savings Plan effective as of July
3, 1995, to be executed this day of ,
1995.
SOUTHERN COMPANY SERVICES, INC.
By:
Its:
(CORPORATE SEAL)
Attest:
By:
Its:
[hutchilm]M:\WPDOCS\SCS\ESP\1995esp.626
-68-
<PAGE>
APPENDIX A - EMPLOYING COMPANIES
The Employing Companies as of July 3, 1995 are:
Alabama Power Company
Georgia Power Company
Gulf Power Company
Mississippi Power Company
Savannah Electric and Power Company
Southern Communications Services, Inc.
Southern Company Services, Inc.
Southern Development and Investment Group, Inc.
Southern Electric International, Inc.
Southern Nuclear Operating Company, Inc.
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<PAGE>
FIRST AMENDMENT TO THE SOUTHERN COMPANY
EMPLOYEE SAVINGS PLAN
WHEREAS, the Board of Directors of Southern Company Services, Inc. (the
"Company") heretofore adopted the amendment and restatement of The Southern
Company Employee Savings Plan (the "Plan"), effective as of July 3, 1995; and
WHEREAS, the Board of Directors of the Company desires to amend the
Plan in order to change the composition of the membership of the Committee
appointed to serve as plan administrator; and
WHEREAS, the Board of Directors of the Company is authorized pursuant
to Section 15.1 of the Plan to amend the Plan at any time.
NOW, THEREFORE, effective as of August 1, 1995, the Board of Directors
of the Company hereby amends the Plan as follows:
I.
Amend Section 13.1 of the Plan by deleting said Section in its entirety
and substituting the following in lieu thereof:
13.1 Membership of Committee. The Plan shall be administered
by the Committee, which shall consist of the individuals then serving
in the positions of Director, System Compensation and Benefits of The
Southern Company; Vice-President, Human Resources of The Southern
Company; and Comptroller of The Southern Company or any other position
or positions that succeed to the dutires of the foregoing positions.
The Committee shall be chaired by the Vice-President, Human Resources
of The Southern Company and may select a Secretary (who may, but need
not, be a member of the Committee) to keep its records or to assist it
in the discharge of its duties.
II.
Except as amended herein by this First Amendment, the Plan shall remain
in full force and effect as amended and restated by the Company prior to the
adoption of this First Amendment.
<PAGE>
IN WITNESS WHEREOF, Southern Company Services, Inc., through its duly
authorized officers, has adopted this First Amendment to The Southern Company
Employee Savings Plan this ________ day of _____________________, 1996.
SOUTHERN COMPANY SERVICES,
INC.
By:
Title:
(CORPORATE SEAL)
ATTEST:
By:
Title:
<PAGE>
SECOND AMENDMENT TO THE
SOUTHERN COMPANY EMPLOYEE SAVINGS PLAN
WHEREAS, the Employee Savings Plan Committee ("Committee") heretofore
adopted the amendment and restatement of The Southern Company Employee Savings
Plan ("Plan"), effective as of July 3, 1995, which was amended by the Board of
Directors of Southern Company Services, Inc. ("Company") effective as of August
1, 1995; and
WHEREAS, the Committee desires to amend the Plan to allow certain
retired Participants to diversify the investment of Employer Matching
Contributions under the Plan, to modify the definition of Highly Compensated
Employee in light of recent guidance from the Internal Revenue Service, and to
amend the Plan in accordance with the comments of the Internal Revenue Service
related to the favorable determination letter application of the Plan as amended
and restated effective as of January 1, 1989; and
WHEREAS, the Committee is authorized pursuant to Section 15.1 of the
Plan to amend the Plan at any time, provided that the amendment does not involve
a substantial increase in cost to any Employing Company or is necessary or
desirable to comply with the laws and regulations applicable to the Plan;
NOW, THEREFORE, the Committee hereby amends the Plan as follows to be
effective as provided below:
I.
Section 2.19 of the Plan shall be amended effective as of July 3, 1995
by adding the following language to the end of such section:
The Contribution Percentage of an Eligible Participant who does not
make Voluntary Participant Contributions or have Employer Matching
Contributions made on his behalf shall be zero.
II.
Section 2.36 of the Plan shall be amended effective as of July 3, 1995
by adding the following language to the end of such section:
The amount of Excess Aggregate Contributions for a Highly
Compensated Employee for a Plan Year is to be determined by the
leveling
<PAGE>
method described in Treasury Regulation Section 1.401(m)-1(e)(2), under
which the Contribution Percentage of the Highly Compensated Employee
with the highest Contribution Percentage shall be reduced to the extent
required to:
(a) enable the Plan to satisfy the Actual Contribution
Percentage Test; or
(b) cause such Highly Compensated Employee's
Contribution Percentage to equal the ratio of the Highly
Compensated Employee with the next highest Contribution
Percentage.
This process must be repeated until the Plan satisfies the
Actual Contribution Percentage Test. The amount of Excess Aggregate
Contributions for a Plan Year for a Highly Compensated Employee is
equal to the total Employer Matching Contributions and Voluntary
Participant Contributions taken into account in determining the Highly
Compensated Employee's Contribution Percentage for purposes of the
Actual Contribution Percentage Test minus the amount determined by
multiplying the Highly Compensated Employee's Contribution Percentage,
as determined above, by his compensation. In no event may the Excess
Aggregate Contributions for any Highly Compensated Employee exceed the
amount of Employer Matching Contributions or Voluntary Participant
Contributions made on behalf of the Highly Compensated Employee for the
Plan Year.
III.
Section 2.40 of the Plan shall be amended effective as of July 3, 1995
by deleting said Section in its entirety and substituting therefor the following
language:
2.40 "Highly Compensated Employee" shall mean any Employee or
former employee (excluding any Employees who may be excluded pursuant
to Code Section 414(q)(8)) who is treated as a highly compensated
employee under Code Section 414(q) as determined under the applicable
rulings and regulations thereunder.
- 2 -
<PAGE>
IV.
Section 5.2 of the Plan shall be amended effective as of April 1, 1996
by adding at the end thereof the following language:
Notwithstanding the foregoing, any Participant whose employment with
the Affiliated Employers is terminated as a result of his retirement
pursuant to the defined benefit pension plan of an Affiliated Employer
may elect on and after April 1, 1996 to invest the amount credited to
his Employer Matching Contribution subaccount in any of the Investment
Funds under the Plan as provided in Article VIII.
V.
Section 8.4 of the Plan shall be amended effective as of April 1, 1996
by adding at the end thereof the following language:
Notwithstanding the foregoing, any Participant whose employment with
the Affiliated Employers is terminated as a result of his retirement
pursuant to the defined benefit pension plan of an Affiliated Employer
may direct on and after April 1, 1996 in accordance with the provisions
of this Section 8.4 and such procedures established by the Committee
that all or any portion of his Account (expressed in number of shares,
whole dollar amounts, or one-percent (1%) increments) attributable to
Employer Matching Contributions be transferred and invested by the
Trustee as of such date in any Investment Fund or Funds designated by
the Participant.
VI.
Except as amended herein by this Second Amendment, the Plan shall
remain in full force and effect as amended and restated by the Company prior to
the adoption of this Second Amendment.
- 3 -
<PAGE>
IN WITNESS WHEREOF, Southern Company Services, Inc. through its duly
authorized officers has adopted this Second Amendment to The Southern Company
Employee Savings Plan this ____ day of _________________________, 1996 to be
effective as stated herein.
SOUTHERN COMPANY
SERVICES, INC.
By:
Its:
ATTEST:
By:
Its:
[CORPORATE SEAL]
- 4 -
Exhibit 10(a)64
THE SOUTHERN COMPANY
EMPLOYEE STOCK OWNERSHIP PLAN
As Amended and Restated
Effective April 1, 1995
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I PURPOSE OF THE PLAN............................................ 1
ARTICLE II DEFINITIONS.................................................... 2
2.1 Account.......................................................... 2
2.2 Affiliated Employer"............................................. 2
2.3 Aggregate Account................................................ 2
(a) "Required Aggregation Group" ... 2
(b) "Permissive Aggregation Group"............................... 2
2.4 Aggregation Group................................................ 3
2.5 Annual Addition.................................................. 3
2.6 Beneficiary...................................................... 4
2.7 Board of Directors............................................... 4
2.8 Break-in-Service Date............................................ 4
2.9 Code............................................................. 4
2.10 Committee........................................................ 4
2.11 Common Stock..................................................... 4
2.12 Company.......................................................... 4
2.13 Compensation..................................................... 5
2.14 Defined Benefit Plan Fraction.................................... 5
2.15 Defined Contribution Plan Fraction............................... 6
2.16 Determination Date............................................... 6
2.17 Determination Year............................................... 6
2.18 Distributee ..................................................... 6
2.19 Direct Rollover ................................................. 6
2.20 Eligible Employee................................................ 6
2.21 Eligible Retirement Plan ........................................ 7
2.22 Eligible Rollover Distribution................................... 7
2.23 Employee......................................................... 7
2.24 Employing Company................................................ 7
2.25 Enrollment Date.................................................. 7
2.26 ERISA............................................................ 8
2.27 Family Member.................................................... 8
2.28 Highly Compensated Employee...................................... 8
2.29 Hour of Service.................................................. 9
2.30 Key Employee..................................................... 9
2.31 Limitation Year.................................................. 9
2.32 Look-Back Year................................................... 9
2.33 Market Value..................................................... 9
2.34 Non-Highly Compensated Employee.................................. 9
2.35 Normal Retirement Date........................................... 9
2.36 One-Year Break in Service........................................ 9
2.37 Participant...................................................... 9
2.38 Plan............................................................. 10
2.39 Plan Year........................................................ 10
2.40 Present Value of Accrued Retirement Income....................... 10
2.41 Qualified Election Period........................................ 10
i
<PAGE>
2.42 Qualified Participant............................................ 10
2.43 SEPCO............................................................ 10
2.44 SEPCO ESOP....................................................... 10
2.45 Super-Top-Heavy Group............................................ 10
2.46 Surviving Spouse ................................................ 10
2.47 Top-Heavy Group.................................................. 10
2.48 Trust or Trust Fund.............................................. 11
2.49 Trust Agreement.................................................. 11
2.50 Trustee.......................................................... 11
2.51 Valuation Date................................................... 11
2.52 Year of Service.................................................. 11
ARTICLE III PARTICIPATION................................................. 12
3.1 Eligibility Requirements......................................... 12
3.2 Duration of Participation........................................ 12
3.3 Participation upon Reemployment.................................. 12
3.4 No Restoration of Previously Distributed Benefits................ 13
3.5 Special Rule for Scott Paper Company Energy
Complex Employees................................................ 13
ARTICLE IV EMPLOYING COMPANY CONTRIBUTION................................. 14
4.1 Amount of Contribution........................................... 14
4.2 Time of Payment.................................................. 14
4.3 Purchases of Common Stock........................................ 14
4.4 Restrictions on Common Stock..................................... 14
4.5 Exclusive Benefit of Employees................................... 14
ARTICLE V PARTICIPANT CONTRIBUTION........................................ 16
5.1 Participant Contributions Not Allowed............................ 16
ARTICLE VI ACCOUNTS OF PARTICIPANTS....................................... 17
6.1 Separate Accounts................................................ 17
6.2 Allocation of Common Stock....................................... 17
6.3 Section 415 Limitations.......................................... 17
6.4 Correction of Contributions in Excess of Section
415 Limits....................................................... 18
6.5 Combination of Plans............................................. 19
6.6 Allocation of Dividends and other Distributions.................. 19
6.7 Valuations....................................................... 20
6.8 Voting Company Stock............................................. 21
6.9 Correction of Prior Incorrect Allocations and
Distributions.................................................... 21
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<PAGE>
ARTICLE VII AUTHORIZED WITHDRAWALS........................................ 22
7.1 In General....................................................... 22
7.2 Distributions in Lieu of Diversification of
Investments Pursuant to Code Section
401(a)(28)(B).................................................... 22
7.3 In-Service Withdrawals........................................... 22
ARTICLE VIII DISTRIBUTIONS TO PARTICIPANTS................................ 24
8.1 Vesting.......................................................... 24
8.2 Distribution upon Retirement..................................... 24
8.3 Distribution upon Death.......................................... 24
8.4 Designation of Beneficiary in the Event of Death................. 24
8.5 Distribution upon Disability..................................... 25
8.6 Distribution upon Termination of Employment...................... 25
8.7 Property Distributed/Method of Payment........................... 26
8.8 Commencement of Benefits......................................... 27
8.9 Distribution upon Death.......................................... 27
8.10 Adjustments for Deferred Accounts or Installment
Payments......................................................... 28
8.11 Transfers between Employing Companies............................ 28
8.12 Distribution to Alternate Payees................................. 28
8.13 Requirement for Direct Rollovers. .............................. 28
8.14 Consent and Notice Requirements.................................. 28
ARTICLE IX ADMINISTRATION................................................. 30
9.1 Membership of Committee.......................................... 30
9.2 Acceptance and Resignation....................................... 30
9.3 Transaction of Business.......................................... 30
9.4 Responsibilities in General...................................... 30
9.5 Committee as Named Fiduciary..................................... 30
9.6 Rules for Plan Administration.................................... 31
9.7 Employment of Agents............................................. 31
9.8 Co-Fiduciaries................................................... 31
9.9 General Records.................................................. 31
9.10 Liability of the Committee....................................... 32
9.11 Reimbursement of Expenses and Compensation of
Committee........................................................ 32
9.12 Expenses of Plan and Trust Fund.................................. 32
9.13 Responsibility for Funding Policy................................ 33
9.14 Code Section 411(d)(6) Protected Benefits........................ 33
9.15 Management of Assets............................................. 33
9.16 Notice and Claims Procedure...................................... 33
9.17 Bonding.......................................................... 33
9.18 Multiple Fiduciary Capacities.................................... 33
iii
<PAGE>
ARTICLE X THE TRUST FUND AND TRUSTEE...................................... 35
10.1 Trustee.......................................................... 35
10.2 Duties of the Trustee............................................ 35
10.3 Diversion........................................................ 35
ARTICLE XI AMENDMENT AND TERMINATION...................................... 36
11.1 Amendment of the Plan............................................ 36
11.2 Termination of the Plan.......................................... 36
11.3 Merger or Consolidation of the Plan.............................. 37
ARTICLE XII TOP-HEAVY PROVISIONS.......................................... 38
12.1 Top-Heavy Plan Requirements......................................38
12.2 Determination of Top-Heavy Status................................38
12.3 Minimum Allocation for Top-Heavy Plan Years......................39
12.4 Adjustments to Maximum Benefit Limits for Top-
Heavy Plans......................................................40
ARTICLE XIII GENERAL PROVISIONS.......................................... 41
13.1 Plan Not an Employment Contract................................. 41
13.2 Non-Alienation or Assignment.................................... 41
13.3 Payments to Minors and Others................................... 42
13.4 Source of Benefits.............................................. 42
13.5 Unclaimed Benefits.............................................. 42
13.6 Governing Law................................................... 42
iv
<PAGE>
ARTICLE I
PURPOSE OF THE PLAN
The purpose of this Plan is to enable Participants to share in the
future of The Southern Company, to provide Participants with an opportunity to
accumulate capital for their future economic security, and to enable
Participants to acquire stock ownership interests in The Southern Company.
Consequently, Employing Company contributions to the Plan will be invested
primarily in Common Stock of The Southern Company.
The Plan is also designed to provide Participants with beneficial
ownership of Common Stock of The Southern Company substantially in proportion to
their relative Compensation without requiring any cash outlay, any reduction in
pay or other benefits, or the surrender of any other rights on the part of
Participants.
The Plan was originally effective January 1, 1976, and was last amended
and restated effective as of April 1, 1995. The Plan is hereby amended and
restated effective April 1, 1995 for the purpose of making certain clarifying
changes to ensure that the Plan document reflects the actual operation of the
Plan and to make such other changes as deemed appropriate by the Committee. It
is intended that this Plan, as amended and restated effective as of April 1,
1995, shall constitute an employee stock ownership plan under Section 4975(e)(7)
of the Internal Revenue Code of 1986, as amended ("Code") and Section 407(d)(6)
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA").
The Plan is a stock bonus plan intended to be qualified under Section 401(a) of
the Code. This amendment and restatement shall not be applicable to former
Participants or Beneficiaries of former Participants whose employment with the
Employing Companies terminated prior to April 1, 1995.
1
<PAGE>
ARTICLE II
DEFINITIONS
All references to articles, sections, subsections, and paragraphs shall
be to articles, sections, subsections, and paragraphs of this Plan unless
another reference is expressly set forth in this Plan. Any words used in the
masculine shall be read and be construed in the feminine where they would so
apply. Words in the singular shall be read and construed in the plural, and all
words in the plural shall be read and construed in the singular in all cases
where they would so apply.
For purposes of this Plan, unless otherwise required by the context,
the following terms shall have the meanings set forth opposite such terms:
2.1 "Account" shall mean the separate account maintained for
each Participant in accordance with Section 6.1.
2.2 "Affiliated Employer" shall mean each Employing Company and (a) any
corporation which is a member of a controlled group of corporations (as defined
in Section 414(b) of the Code) which includes any Employing Company; (b) any
trade or business (whether or not incorporated) which is under common control
(as defined in Section 414(c) of the Code) with any Employing Company; (c) any
organization (whether or not incorporated) which is a member of an affiliated
service group (as defined in Section 414(m) of the Code) which includes any
Employing Company; and (d) any other entity required to be aggregated with an
Employing Company pursuant to regulations under Section 414(o) of the Code.
Notwithstanding the foregoing, for purposes of applying the limitations of
Section 6.3, the term Affiliated Employer shall be adjusted as required by Code
Section 415(h).
2.3 "Aggregate Account" shall mean with respect to a
Participant as of the Determination Date, the sum of the following:
(a) the Account balance of such Participant as of the
most recent valuation occurring within a twelve-month period
ending on the Determination Date;
(b) an adjustment for any contributions due as of the
Determination Date;
(c) any Plan distributions, including unrelated rollovers and
plan-to-plan transfers (ones which are both initiated by the Employee
and made from a plan maintained by one employer to a plan maintained by
another employer), but not related rollovers or plan-to-plan transfers
(ones either not initiated by the Employee or made to a plan maintained
by the same employer), made within the Plan Year that includes
2
<PAGE>
the Determination Date or within the four preceding Plan Years,
including distributions made prior to January 1, 1984, and
distributions made under a terminated plan which if it had not been
terminated would have been required to be included in an Aggregation
Group;
(d) any Employee contributions, whether voluntary or
mandatory;
(e) unrelated rollovers and plan-to-plan transfers to
this Plan accepted prior to January 1, 1984; and
(f) related rollovers and plan-to-plan transfers to this
Plan.
2.4 "Aggregation Group" shall mean either a Required Aggregation Group
or a Permissive Aggregation Group as hereinafter determined.
(a) Required Aggregation Group: In determining a Required
Aggregation Group hereunder, each plan of the Affiliated Employers in
which a Key Employee is a participant and each other plan of the
Affiliated Employers which enables any plan in which a Key Employee
participates to meet requirements of Code Section 401(a)(4) or 410 will
be required to be aggregated. Such group shall be known as a Required
Aggregation Group.
(b) Permissive Aggregation Group: The Affiliated Employers may
also include any other plan not required to be included in the Required
Aggregation Group, provided the resulting group, taken as a whole,
would continue to satisfy the provisions of Code Section 401(a)(4) or
410. Such group shall be known as a Permissive Aggregation Group.
2.5 "Annual Addition" shall mean the amount allocated to a
Participant's Account and accounts under all defined contribution plans
maintained by the Affiliated Employers during a Limitation Year that constitutes
(a) Affiliated Employer contributions,
(b) voluntary participant contributions,
(c) forfeitures, if any, allocated to a Participant's
Account and accounts under all defined contribution plans
maintained by the Affiliated Employers, and
(d) amounts described in Sections 415(l)(1) and
419A(d)(2) of the Code.
3
<PAGE>
2.6 "Beneficiary" shall mean any person(s) who, or estate(s), trust(s),
or organization(s) which, in accordance with the provisions of Section 8.4,
become entitled to receive benefits upon the death of a Participant.
2.7 "Board of Directors" shall mean the Board of Directors of
Southern Company Services, Inc.
2.8 "Break-in-Service Date" means the earlier of the
following dates:
(a) the date on which an Employee terminates employment,
is discharged, retires, or dies; or
(b) the last day of an approved leave of absence
including any extension.
In the case of an individual who is absent from work for maternity or
paternity reasons, such individual shall not incur a Break-in-Service Date
earlier than the expiration of the second anniversary of the first date of such
absence; provided, however, that the twelve-consecutive-month period beginning
on the first anniversary of the first date of such absence shall not constitute
a Year of Service. For purposes of this paragraph, an absence from work for
maternity or paternity reasons means an absence (a) by reason of the pregnancy
of the Employee, (b) by reason of a birth of a child of the Employee, (c) by
reason of the placement of a child with the Employee in connection with the
adoption of such child by such Employee, or (d) for purposes of caring for such
child for a period beginning immediately following such birth or placement.
2.9 "Code" shall mean the Internal Revenue Code of 1986, as amended, or
any successor statute, and the rulings and regulations promulgated thereunder.
In the event an amendment to the Code renumbers a section of the Code referred
to in this Plan, any such reference automatically shall become a reference to
such section as renumbered.
2.10 "Committee" shall mean the Committee appointed pursuant
to Section 9.1 to serve as plan administrator.
2.11 "Common Stock" shall mean the common stock of The Southern
Company, which stock is a qualifying employer security within the meaning of
Code Section 409(l)(1) and which stock is a registration-type class of
securities as defined in Code Section 409(e)(4).
2.12 "Company" shall mean Southern Company Services, Inc., and
its successors.
4
<PAGE>
2.13 "Compensation" shall mean the total amount of a Participant's
salary or wages, amounts received as sick pay and for leaves of absence with
pay, overtime pay, any shift, nuclear, or other pay differentials, substitution
pay, and other amounts received for personal services actually rendered, amounts
paid by any Employing Company to The Southern Company Employee Savings Plan as
Elective Employer Contributions (as defined therein) pursuant to the
Participant's exercise of his deferral option made in accordance with Section
401(k) of the Code, all awards under The Southern Company Performance Pay Plan,
The Southern Company Productivity Improvement Plan, The Southern Company
Executive Productivity Improvement Plan, and the Incentive Compensation Plan for
Southern Electric International, Inc. includable as gross income, and amounts
contributed by an Employing Company to the Southern Electric System Flexible
Benefits Plan or The Southern Company Flexible Benefits Plan on behalf of the
Participant pursuant to his salary reduction election under either such plan,
and before deduction of taxes, social security, etc. The term "Compensation"
shall not include amounts which are reimbursement to a Participant paid by any
Employing Company, including but not limited to, reimbursement for such items as
moving expenses and travel and entertainment expenses, and imputed income for
automobile expenses, tax preparation expenses, and health and life insurance
premiums paid by an Employing Company.
For Plan Years beginning on and after January 1, 1994, the Compensation
of each Participant taken into account for purposes of this Plan shall not
exceed $150,000 (as adjusted pursuant to Code Section 401(a)(17)). In
determining the Compensation of a Participant for purposes of this limitation,
the rules of Section 414(q)(6) of the Code shall apply, except in applying such
rules, the term "family" shall include only the spouse of the Participant and
any lineal descendants of the Participant who have not attained age 19 before
the close of the Plan Year. If, as a result of the application of the rules of
Code Section 414(q)(6), the adjusted dollar limitation is exceeded, then the
limitation shall be prorated among the affected individuals in proportion to
each such individual's Compensation, as determined under this Section 2.13 prior
to the application of this limitation.
2.14 "Defined Benefit Plan Fraction" shall mean the following
fraction:
(numerator) Sum of the projected annual benefits of the
Participant under all Affiliated Employer defined benefit
plans (whether or not terminated) determined as of the close
of the Plan Year.
(denominator) The lesser of (a) the product of 1.25 multiplied
by the dollar limitation in effect for the Plan Year under
Code Sections 415(b)(1)(A) or 415(d), or (b) 1.4 multiplied by
100% of the Participant's average
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compensation for his highest three (3) consecutive Plan Years
of participation as adjusted under Treasury Regulation Section
1.415-5.
2.15 "Defined Contribution Plan Fraction" shall mean the
following fraction:
(numerator) The sum of all Annual Additions to the account of
the Participant as of the close of the Plan Year under all
defined contribution plans maintained by the Affiliated
Employers for the current and prior Limitation Years (whether
or not terminated), including this Plan.
(denominator) The sum of the lesser of the following amounts
determined for such Plan Year and for each prior Plan Year in
which the Participant has a Year of Service: (a) 1.25
multiplied by the dollar limitation in effect under Code
Section 415(c)(1)(A) for the Plan Year (determined without
regard to Code Section 415(c)(6)), or (b) 1.4 multiplied by
the amount that may be taken into account under Code Section
415(c)(1)(B) with respect to a Participant for the Plan Year.
2.16 "Determination Date" shall mean with respect to a Plan Year, the
last day of the preceding Plan Year.
2.17 "Determination Year" shall mean the Plan Year being
tested.
2.18 "Distributee" shall include an Employee or former Employee. In
addition, the Employee's or former Employee's surviving spouse and the
Employee's or former Employee's spouse or former spouse who is an alternate
payee under a qualified domestic relations order, as defined in Section 414(p)
of the Code, are Distributees with regard to the interest of the spouse or
former spouse.
2.19 "Direct Rollover" shall mean a payment by the Plan to the
Eligible Retirement Plan specified by the Distributee.
2.20 "Eligible Employee" shall mean an Employee who is employed by an
Employing Company and (a) who was eligible to be included in the Plan on January
1, 1991, or (b) who is a regular full-time, regular part-time, or cooperative
education employee other than:
(a) an Employee who is treated as such solely by reason
of the "leased employee" rules of Code Section 414(n);
(b) any Employee who is represented by a collective
bargaining agent unless the representatives of his bargaining
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unit and the Employing Company mutually agree to participation
in the Plan subject to its terms by members of his bargaining
unit; and
(c) an individual who is a cooperative education employee and
who first performs an Hour of Service on or after January 1, 1995.
2.21 "Eligible Retirement Plan" shall mean an individual retirement
account described in Section 408(a) of the Code, an individual retirement
annuity described in Section 408(b) of the Code, an annuity plan described in
Section 403(a) of the Code, or a qualified trust described in Section 401(a) of
the Code that accepts the Distributee's Eligible Rollover Distribution. However,
in the case of an Eligible Rollover Distribution to a surviving spouse, an
Eligible Retirement Plan is an individual retirement account or individual
retirement annuity.
2.22 "Eligible Rollover Distribution" shall mean any distribution of
all or any portion of the balance to the credit of the Distributee, except that
an Eligible Rollover Distribution does not include: (a) any distribution that is
one of a series of substantially equal periodic payments (not less frequently
than annually) made for the life (or life expectancy) of the Distributee, the
joint lives (or joint life expectancies) of the Distributee and the
Distributee's Beneficiary, or for a specified period of 10 years or more; (b)
any distribution to the extent such distribution is required under Section
401(a)(9) of the Code; and (c) the portion of any distribution that is not
includable in gross income (determined without regard to the exclusion for net
unrealized appreciation with respect to employer securities).
2.23 "Employee" shall mean each individual who is employed by an
Affiliated Employer under common law and each individual who is required to be
treated as an employee pursuant to the "leased employee" rules of Code Section
414(n) other than a leased employee described in Code Section 414(n)(5).
2.24 "Employing Company" shall mean the Company and any affiliate or
subsidiary of The Southern Company which the Board of Directors may from time to
time determine to bring under the Plan and which shall adopt the Plan, and any
successor of them. The Employing Companies are set forth on Appendix A to the
Plan, as updated from time to time. No such entity shall be treated as an
Employing Company prior to the date it adopts the Plan.
2.25 "Enrollment Date" shall mean the first day of each
calendar month.
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2.26 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, or any successor statute, and the rulings and regulations
promulgated thereunder. In the event an amendment to ERISA renumbers a section
of ERISA referred to in this Plan, any such reference automatically shall become
a reference to such section as renumbered.
2.27 "Family Member" shall mean the spouse, lineal ascendants and
descendants of an Employee or former Employee and the spouse of such ascendants
and descendants of an Employee or former Employee as described in Section
414(q)(6)(B) of the Code.
2.28 "Highly Compensated Employee" shall mean any Employee or former
Employee (excluding any Employees who may be excluded pursuant to Code Section
414(q)(8)) who during the Determination Year or the Look-Back Year:
(a) was at any time a five-percent (5%) owner (as
defined in Code Section 416(i)(1)(B)(i));
(b) received compensation (within the meaning of Code Section
414(q)(7)) from an Affiliated Employer in excess of $75,000 (or such
amount as may be adjusted by the Secretary of the Treasury);
(c) received compensation (within the meaning of Code Section
414(q)(7)) from an Affiliated Employer in excess of $50,000 (or such
amount as may be adjusted by the Secretary of the Treasury) and was in
the top-paid group (as defined in Code Section 414(q)(4)) of Employees
for such year; or
(d) was at any time an officer and received compensation
(within the meaning of Code Section 414(q)(7)) greater than fifty
percent (50%) of the amount in effect under Code Section 415(b)(1)(A)
for such year.
Notwithstanding the foregoing, the determination of which Employees are
Highly Compensated Employees shall at all times be subject to the rules of Code
Section 414(q); the maximum number of officers taken into account under (d)
above shall not exceed fifty (50); and Employees who were not described in (b),
(c) or (d) above during the Look-Back Year shall not be considered as described
in such subsections for the Determination Year unless such Employees are members
of the group consisting of the one hundred (100) Employees paid the greatest
compensation (within the meaning of Code Section 414(q)(7)) for the
Determination Year.
A Highly Compensated Employee shall include any Employee who separated
from service (or was deemed to have separated) prior to the Plan Year, performs
no service for an Affiliated Employer during the Plan Year, and was a Highly
Compensated Employee for
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either the separation year or any Determination Year ending on or after the
Employee's fifty-fifth (55th) birthday.
If an Employee is, during a Determination Year or a Look-Back Year, a
Family Member of either (x) a five-percent (5%) owner who is an Employee or (y)
a former Employee or a Highly Compensated Employee who is one of the top-ten
most Highly Compensated Employees ranked on the basis of compensation paid by an
Affiliated Employer during such year, then the Family Member and the five-
percent (5%) owner or top-ten Highly Compensated Employee shall be treated as a
single employee receiving compensation and Plan contributions equal to the sum
of the compensation and contributions for such individuals.
2.29 "Hour of Service" shall mean each hour for which an Employee is
paid or entitled to payment for the performance of duties for an Affiliated
Employer.
2.30 "Key Employee" shall mean any Employee or former Employee (and his
Beneficiary) who is a key employee within the meaning of Code Section 416(i)(1).
2.31 "Limitation Year" shall mean the Plan Year.
2.32 "Look-Back Year" shall mean the Plan Year preceding the
Determination Year.
2.33 "Market Value" prior to September 1, 1995 shall mean the closing
price of a share of the Common Stock based on consolidated trading as defined by
the Consolidated Tape Association and reported as part of the consolidated
trading prices of New York Stock Exchange listed securities for the 20
consecutive trading days immediately preceding the date on which the Common
Stock is contributed to the Plan or purchased from The Southern Company, and on
and after September 1, 1995 shall mean the average purchase price of a share of
the Common Stock under The Southern Company Employee Savings Plan as of the
applicable Valuation Date.
2.34 "Non-Highly Compensated Employee" shall mean an Employee who is
neither a Highly Compensated Employee nor the Family Member of a Highly
Compensated Employee.
2.35 "Normal Retirement Date" shall mean the first day of the month
following a Participant's sixty-fifth (65th) birthday.
2.36 "One-Year Break in Service" shall mean each twelve-
consecutive-month period within the period commencing with an Employee's
Break-in-Service Date and ending on the date the Employee is again credited with
an Hour of Service.
2.37 "Participant" shall mean (a) an Eligible Employee who
satisfied the eligibility requirements set forth in Section 3.1 of
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the Plan and whose participation in the Plan at the time of reference has not
been terminated as provided in the Plan and (b) an Employee or former Employee
who has ceased to be a Participant under (a) above, but for whom an Account is
maintained under the Plan.
2.38 "Plan" shall mean The Southern Company Employee Stock Ownership
Plan, as described herein and as it may be amended from time to time. Prior to
January 1, 1991, the Plan was named The Employee Stock Ownership Plan of The
Southern Company System.
2.39 "Plan Year" shall mean the twelve-month period commencing January
1st and ending on the last day of December next following.
2.40 "Present Value of Accrued Retirement Income" shall mean an amount
determined solely for the purpose of determining if the Plan or any other plan
included in a Required Aggregation Group of which the Plan is a part is top
heavy in accordance with Code Section 416.
2.41 "Qualified Election Period" shall mean the six-Plan-Year period
beginning with the Plan Year in which the Participant first becomes a Qualified
Participant.
2.42 "Qualified Participant" shall mean a Participant who has attained
age 55 and who has completed at least 10 years of participation in the Plan,
whether or not he remains an Employee.
2.43 "SEPCO" shall mean Savannah Electric and Power Company.
2.44 "SEPCO ESOP" shall mean the Employee Stock Ownership Plan of
Savannah Electric and Power Company.
2.45 "Super-Top-Heavy Group" shall mean an Aggregation Group that would
be a Top-Heavy Group if 90% were substituted for 60% in Section 2.47.
2.46 "Surviving Spouse" shall mean the person to whom the Participant
is married on the date of his death, if such spouse is then living, provided
that the Participant and such spouse shall have been married throughout the one
(1) year period ending on the date of the Participant's death.
2.47 "Top-Heavy Group" shall mean an Aggregation Group in
which, as of the Determination Date, the sum of:
(a) the Present Value of Accrued Retirement Income of
Key Employees under all defined benefit plans included in that
group, and
(b) the Aggregate Accounts of Key Employees under all
defined contribution plans included in the group,
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exceeds 60% of a similar sum determined for all employees.
2.48 "Trust or Trust Fund" shall mean the trust established
pursuant to the Trust Agreement.
2.49 "Trust Agreement" shall mean the trust agreement between the
Company and the Trustee, as described in Article X.
2.50 "Trustee" shall mean the person or corporation designated as
trustee under the Trust Agreement, including any successor or successors.
2.51 "Valuation Date" shall mean each business day of the New
York Stock Exchange.
2.52 "Year of Service" shall mean a twelve-month period of employment
as an Employee, including any fractions thereof. Calculation of the twelve-month
periods shall commence with the Employee's first day of employment, which is the
date on which an Employee first performs an Hour of Service, and shall terminate
on his Break-in-Service Date. Thereafter, if he has more than one period of
employment as an Employee, his Years of Service for any subsequent period shall
commence with the Employee's reemployment date, which is the first date
following a Break-in-Service Date on which the Employee performs an Hour of
Service, and shall terminate on his next Break-in-Service Date. An Employee who
has a Break-in- Service Date and resumes employment with the Affiliated
Employers within twelve months of his Break-in-Service Date shall receive a
fractional Year of Service for the period of such cessation of employment.
For purposes of determining an Employee's eligibility to participate,
the following years of service shall also be treated as Years of Service:
(a) In respect of an Employee of an Employing Company who
transfers to an Employing Company from Southern Electric International,
Inc. following its adoption of a defined contribution plan under
Section 401(a) of the Code, his credited years of service under such
plan as of his date of transfer.
(b) In respect of an Employee of an Employing Company who
transfers to an Employing Company from SEPCO on or before December 31,
1992, his credited years of service under the SEPCO ESOP for actual
service while employed at SEPCO as of his date of transfer.
Notwithstanding anything in this Section 2.52 to the contrary, an
Employee shall not receive credit for more than one Year of Service with respect
to any twelve-consecutive-month period.
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ARTICLE III
PARTICIPATION
3.1 Eligibility Requirements. Each Eligible Employee shall become a
Participant on the later of April 1, 1995 or the Enrollment Date next following
the date on which the Eligible Employee completes a Year of Service.
3.2 Duration of Participation. Once an Eligible Employee becomes a
Participant in the Plan, he shall remain an active Participant during each Plan
Year in which he is an Eligible Employee as of the last day of such Plan Year;
provided, however, that an Eligible Employee whose employment terminates during
a Plan Year by reason of death, retirement pursuant to his Affiliated Employer's
pension plan, or total and permanent disability, as determined by the Social
Security Administration, shall not cease to be an active Participant until the
first day of the Plan Year next following the date such termination of
employment occurs. In addition, a Participant in the Plan shall remain an active
Participant during periods of authorized leaves of absence granted by an
Employing Company under rules uniformly applicable to all persons similarly
situated, during periods of sickness, disability leave, jury or military duty,
or vacation or holiday leave. If the Employee does not return to work within the
period of his authorized leave of absence (not including sickness or disability
leave) or within the period provided by law in respect of absence for military
duty, he shall cease to be an active Participant in the Plan as of the first day
next following the date his authorized leave of absence or military duty is
terminated.
3.3 Participation upon Reemployment. If an Employee terminates his
employment with an Affiliated Employer and is subsequently reemployed as an
Eligible Employee, the following rules shall apply in determining his
eligibility to participate:
(a) If the reemployed Eligible Employee had not completed the
Year of Service requirement of Section 3.1 prior to his termination of
employment and is reemployed following a One-Year Break in Service, he
shall not receive credit for fractional periods of service completed
prior to the One-Year Break in Service until he has completed a Year of
Service after his return. A reemployed Employee who had not completed
the Year of Service requirement and who is reemployed within 12 months
of his Break-in-Service Date shall receive service credit for the
period in which he performed no services in accordance with Section
2.52.
(b) If the reemployed Eligible Employee had fulfilled the
eligibility requirements of Section 3.1 prior to his termination of
employment and is reemployed as an Eligible Employee, whether before or
after he incurs a One-Year Break
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<PAGE>
in Service, he shall again become a Participant in the Plan as
of the date of his reemployment.
3.4 No Restoration of Previously Distributed Benefits. A Participant
who had terminated his employment with the Affiliated Employers and who has
received a distribution of the amount credited to his Account pursuant to
Section 8.6 shall not be entitled to restore the amount of such distribution to
his Account if he is reemployed and again becomes a Participant in the Plan.
3.5 Special Rule for Scott Paper Company Energy Complex Employees. An
Eligible Employee who was an employee of Scott Paper Company Energy Complex on
December 16, 1994, and who became an Employee of an Employing Company effective
December 17, 1994, shall be credited with a Year of Service as of December 31,
1994, and shall become a Participant on January 1, 1995.
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ARTICLE IV
EMPLOYING COMPANY CONTRIBUTION
4.1 Amount of Contribution. An Employing Company may contribute to the
Plan, in respect of each Plan Year, cash or Common Stock in an amount (or under
such formula) as the Company, in its sole and absolute discretion, shall
determine. If Common Stock is contributed to the Plan, the number of shares
contributed shall be determined by the Market Value of such Common Stock.
4.2 Time of Payment. The Employing Company shall transfer the amount of
cash or Common Stock described in Section 4.1 to the Plan on any date or dates
consistent with the law, which the Employing Company may select, provided that
the contributions for a Plan Year shall be transferred not later than the time
(including extensions) for filing the consolidated federal income tax return for
such Plan Year.
4.3 Purchases of Common Stock. If a contribution to the Plan under
Section 4.1 is made in cash, the Trustee shall use such contribution to purchase
Common Stock; provided, however, that the Plan may retain a cash reserve in an
amount which does not exceed the value of fractional shares and declared cash
dividends allocable to those Participants entitled to receive an immediate
distribution of their Accounts at the time of the contribution of the cash. If
Common Stock is purchased from The Southern Company, the price paid therefor by
the Trustee shall be the Market Value of such Common Stock, as determined by the
Company.
4.4 Restrictions on Common Stock. No Common Stock held by the Plan may
be used to satisfy a loan made to the Plan, nor may any Common Stock held by the
Plan be used as collateral for a loan made to the Plan.
4.5 Exclusive Benefit of Employees. All contributions made pursuant to
the Plan shall be held by the Trustee in accordance with the terms of the Trust
Agreement for the exclusive benefit of those Employees, including former
Employees, who are Participants under the Plan, and their Beneficiaries, and
shall be applied to provide benefits under the Plan and to pay expenses of
administration of the Plan and the Trust, to the extent that such expenses are
not otherwise paid. At no time prior to the satisfaction of all liabilities with
respect to such Employees and their Beneficiaries shall any part of the Trust
Fund be used for, or diverted to, purposes other than for the exclusive benefit
of such Employees and their Beneficiaries. However, notwithstanding the
provisions of this Section 4.5:
(a) If any contribution under the Plan is conditioned on
initial qualification of the Plan under Section 401(a) of the Code and
if the Plan does not so qualify, the Trustee shall,
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upon written request of the Employing Company, return to the Employing
Company the amount of such contribution (increased by earnings
attributable thereto and reduced by losses attributable thereto) within
one calendar year after the date that qualification of the Plan is
denied; provided that the application for the determination is made by
the time prescribed by law for filing the Employing Company's return
for the taxable year in which the Plan is adopted or such later date as
the Secretary of the Treasury may prescribe.
(b) If a contribution is conditioned upon the deductibility of
the contribution under Section 404 of the Code, then to the extent the
deduction is disallowed the Trustee shall, upon written request of the
Employing Company, return the contribution (to the extent disallowed)
to the Employing Company within one year after the date the deduction
is disallowed.
(c) If a contribution or any portion thereof is made by the
Employing Company by a mistake of fact, the Trustee shall, upon written
request of the Employing Company, return the contribution or such
portion to the Employing Company within one year after the date of
payment to the Trustee.
The amount which may be returned to the Employing Company under this
Section 4.5, is the excess of (a) the amount contributed over (b) the amount
that would have been contributed had there not occurred a mistake of fact or
disallowance of the deduction. Earnings attributable to the excess contribution
shall not be returned to the Employing Company, but losses attributable thereto
shall reduce the amount to be so returned. If the withdrawal of the amount
attributable to the mistaken contribution would cause the balance of the Account
of any Participant to be reduced to less than the balance which would have been
in the Account had the mistaken amount not been contributed, then the amount to
be returned to the Employing Company shall be limited so as to avoid such
reduction.
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ARTICLE V
PARTICIPANT CONTRIBUTION
5.1 Participant Contributions Not Allowed. Participant contributions
are neither required nor permitted under the Plan. Notwithstanding the
foregoing, to the extent that Participant contributions were permitted under the
terms of the Plan in effect prior to January 1, 1983, such contributions and/or
pledges of contributions attributable to Plan Years beginning before January 1,
1983, may be made in accordance with the applicable provisions of the terms of
the Plan as in effect prior to January 1, 1983.
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ARTICLE VI
ACCOUNTS OF PARTICIPANTS
6.1 Separate Accounts. The Committee shall establish and maintain a
separate Account for each Participant, with separate subaccounts as the
Committee shall direct in its sole discretion. The subaccounts maintained in
accordance with this Section 6.1 shall be for bookkeeping purposes only.
Subaccounts, to the extent they were created under the Plan prior to January 1,
1983, shall be maintained, if necessary.
The Committee shall also establish separate subaccounts for each
Participant, as the Committee shall direct, as is necessary to reflect a
Participant's interest in the Plan resulting from the transfer of his accounts
from the SEPCO ESOP due to the merger of such plan into this Plan effective as
of January 1, 1993. Any such subaccounts so established shall be subject to the
terms and conditions of this Plan.
6.2 Allocation of Common Stock. All shares of Common Stock contributed
or purchased with cash contributions for such Plan Year and all fractional
rights to such shares shall be allocated as of the close of such Plan Year by
the Committee to the Account of each Participant who was a Participant or deemed
to be a Participant pursuant to Section 3.2 on the last day of such Plan Year.
Such allocation shall be made in accordance with the ratio to which each
eligible Participant's Compensation for such Plan Year bears to the total
Compensation of all Participants eligible to share in the contribution for such
Plan Year.
6.3 Section 415 Limitations.
(a) Notwithstanding any provision of the Plan to the contrary,
the total Annual Additions allocated to the Account (and the accounts
under all defined contribution plans maintained by an Affiliated
Employer) of any Participant for any Limitation Year in accordance with
Code Section 415 and the regulations thereunder, which are incorporated
herein by this reference, shall not exceed the lesser of the following
amounts:
(1) twenty-five percent (25%) of the Participant's
compensation in the Limitation Year; or
(2) $30,000 (as adjusted pursuant to Code Section
415(d)(1)(C)).
(b) If a Participant is also a participant in any
Affiliated Employer's defined benefit plan, then in addition
to the limitations in (a) above, the sum of the Defined
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Benefit Plan Fraction and Defined Contribution Plan Fraction shall not
exceed 1.0 for any Limitation Year.
(c) For purposes of this Section 6.3, wherever the term
"compensation" is used, such term shall mean all amounts paid or made
available to an Employee which are treated as compensation from an
Affiliated Employer under Treasury Regulation Section 1.415-2(d)(2) and
which are not excluded from compensation under Treasury Regulation
Section 1.415- 2(d)(3).
(d) The Annual Addition for any Plan Year beginning before
January 1, 1987 shall not be recomputed to treat all employee
contributions as an Annual Addition.
(e) If the Plan satisfied the applicable requirements of
Section 415 of the Code as in effect for all Plan Years beginning
before January 1, 1987, an amount shall be subtracted from the
numerator of the Defined Contribution Plan Fraction (not exceeding the
numerator), as prescribed by the Secretary of the Treasury, so that the
sum of the Defined Benefit Plan Fraction and the Defined Contribution
Plan Fraction computed under Section 415(e)(1) of the Code (as revised
by this Section 6.3) does not exceed 1.0 for the Plan Year. In
addition, the Defined Contribution Plan Fraction for a Participant may
be determined by taking into account the special transition rule of
Code Section 415(e)(6).
(f) If the Participant was a participant in one or more
defined benefit plans maintained by the Affiliated Employers which were
in existence on July 1, 1982, the denominator of the Defined Benefit
Plan Fraction shall not be less than 1.25% of the sum of the annual
benefits under such plans which the Participant had accrued as of the
later of September 30, 1983 or the end of the last Limitation Year
beginning before January 1, 1983. The preceding sentence applies only
if the defined benefit plans individually, and in the aggregate satisfy
the requirements of Code Section 415 as in effect at the end of the
1982 Limitation Year.
6.4 Correction of Contributions in Excess of Section 415 Limits. If the
Annual Additions for a Participant exceed the limits of Section 6.3 as a result
of the allocation of forfeitures, if any, a reasonable error in estimating a
Participant's annual compensation for purposes of the Plan, a reasonable error
in determining the amount of elective deferrals (within the meaning of Section
402(g)(3) of the Code) that may be made with respect to any individual, or under
other limited facts and circumstances that the Commissioner of the Treasury
finds justify the availability of the rules set forth in this Section 6.4, the
excess amounts shall not be deemed Annual Additions if they are corrected by
forfeiture of that portion, or all, of the Employing Company contributions that
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<PAGE>
were allocated to the Participant's Account, as is necessary to ensure
compliance with Section 6.3.
Any amounts forfeited under this Section 6.4 shall be held in a suspense
account and shall be applied, subject to Section 6.3, toward funding the
Employing Company contributions for the next succeeding Plan Year. Such
application shall be made prior to any Employing Company contributions that
would constitute Annual Additions. No income or investment gains and losses
shall be allocated to the suspense account provided for under this Section 6.4.
If any amount remains in a suspense account provided for under this Section 6.4
upon termination of this Plan, such amount will revert to the Employing
Companies notwithstanding any other provision of this Plan.
6.5 Combination of Plans. Notwithstanding any provisions contained
herein to the contrary, in the event that a Participant participates in a
defined contribution plan or defined benefit plan required to be aggregated with
this Plan under Code Section 415(g) and the sum of the Defined Contribution Plan
Fraction and Defined Benefit Plan Fraction with respect to a Participant exceeds
the limitations contained in Section 6.3(b), corrective adjustments shall not be
made under this Plan until the corrective adjustments have been made under such
other defined benefit plan and defined contribution plan unless distribution of
benefit payments to the affected Participant has commenced under such defined
benefit plan. In such event, the corrective adjustment shall first be made under
this Plan, if possible. If an Employee participates in more than one defined
contribution plan maintained by an Affiliated Employer and his Annual Additions
exceed the limitations of Section 6.3(a), corrective adjustments shall first be
made under such other defined contribution plan and then, to the extent
necessary, under this Plan.
6.6 Allocation of Dividends and other Distributions.
(a) Any dividends or other distributions of cash on the Common
Stock shall be allocated to a Participant's Account on the basis of
Account balances. The amount of any cash dividends on Common Stock so
allocated may be retained in the Participants' Accounts or paid to such
Participants pursuant to (b) below. Any cash dividends retained in the
Accounts of Participants and any other distributions of cash on the
Common Stock so allocated shall be reinvested by the Trustee in Common
Stock which shall be credited to each such Participant's Account. In
reinvesting such dividends or other distributions of cash on the Common
Stock, the Trustee may purchase Common Stock under The Southern
Company's Dividend Reinvestment and Stock Purchase Plan, from The
Southern Company, or on the open market.
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If a dividend or other distribution on the Common Stock
allocated to a Participant's Account is of additional shares of Common
Stock, the Trustee shall credit such shares to the Participant's
Account. If a dividend or other distribution on the Common Stock
allocated to a Participant's Account is of property other than cash or
additional shares of Common Stock, the Trustee shall sell such property
for an amount not less than its fair market value as determined by the
Trustee and reinvest the proceeds of such sale in shares of Common
Stock pursuant to this Section 6.6. All allocations under this
subsection shall be made on the basis of the subaccounts created in
accordance with Section 6.1.
(b) Any cash dividends received by the Trustee on Common Stock
allocated to the Accounts of Participants (or Beneficiaries) may be
retained in the Participants' Accounts as provided in (a) above or may
be paid to such Participants at the sole discretion of the Committee;
provided that any current payment in cash must be made within two years
of the date such dividends are received by the Trustee, or, if the
Employing Company desires a tax deduction for the amount of such
dividends pursuant to Code Section 404(k), such cash dividends shall be
distributed in cash not later than 90 days after the close of the Plan
Year in which such dividends were paid.
(c) Notwithstanding (b) above, if during any Plan Year the
Committee shall determine not to pay cash dividends received by the
Trustee on Common Stock allocated to Accounts of Participants to such
Participants, a Participant may elect to have such cash dividends (or
other distributions) paid to him currently by the Trustee. Such an
election shall be made in such time and manner as may be prescribed by
the Committee and shall be effective only with respect to dividends
which are payable by The Southern Company to the Trustee in the Plan
Years which begin after the Plan Year in which the election is made. An
election shall remain in full force until revoked by a Participant. Any
revocation shall be made in accordance with procedures established by
the Committee and shall become effective only with respect to dividends
payable by The Southern Company to the Trustee in Plan Years which
begin after the Plan Year in which the revocation is made.
6.7 Valuations. Each Participant shall be furnished a statement of his
Account no less frequently than annually and upon any distribution, which
statement shall reflect the balances of the subaccounts referred to in Section
6.1. Each Participant's Account shall be adjusted as of each Valuation Date to
reflect any increase or decrease in the number of shares of Common Stock
credited to his Account and to reflect the effect of income collected, realized
and unrealized gains and losses, and expenses attributable thereto.
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6.8 Voting Company Stock. Before each annual or special meeting of
shareholders of The Southern Company, there shall be sent to each Participant a
copy of the proxy soliciting material for the meeting, together with a form
requesting instructions to the Trustee on how to vote the shares of Common Stock
credited to such Participant's Account at the end of the month immediately
preceding the record date of the Common Stock. Fractional shares shall be
combined and voted by the Trustee to the extent possible to reflect the
instructions of Participants credited with such shares. If a Participant does
not provide the Trustee or its designated agent with timely voting instructions
for the Trustee, the Pension Fund Investment Review Committee of The Southern
Company System may direct the Trustee how to vote such Participant's shares. If
the Pension Fund Investment Review Committee of The Southern Company System does
not provide the Trustee or its designated agent with timely voting instructions,
the Trustee, if required to do so by applicable law, may vote such Participant's
shares. The Pension Fund Investment Review Committee of The Southern Company
System may direct the Trustee with respect to voting unallocated shares of
Common Stock, if any. If the Pension Fund Investment Review Committee of The
Southern Company System does not provide the Trustee or its designated agent
with timely voting instructions, the Trustee, if required to do so by applicable
law, may vote such unallocated shares.
6.9 Correction of Prior Incorrect Allocations and Distributions.
Notwithstanding any provisions contained herein to the contrary, in the event
that, as of any Valuation Date, adjustments are required in any Participants'
Accounts to correct any incorrect allocation of contributions or investment
earnings or losses, or such other discrepancies in Account balances that may
have occurred previously, the Employing Companies may make additional
contributions to the Plan to be applied to correct such incorrect allocations or
discrepancies. The additional contributions shall be allocated by the Committee
to adjust such Participants' Accounts to the value which would have existed on
said Valuation Date had there been no prior incorrect allocation or
discrepancies. The Committee shall also be authorized to take such other actions
as it deems necessary to correct prior incorrect allocations under the Plan or
discrepancies in the Accounts of the Participants.
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ARTICLE VII
AUTHORIZED WITHDRAWALS
7.1 In General. Except as provided in this Article VII, shares of
Common Stock allocated to the Account of a Participant may be distributed to him
only in the event he ceases to be an Employee, whether by reason of retirement,
total and permanent disability, as determined by the Social Security
Administration, death, or other termination of employment. Distributions upon
termination of employment for any of the above reasons, shall be made in
accordance with Article VIII.
7.2 Distributions in Lieu of Diversification of Investments
Pursuant to Code Section 401(a)(28)(B).
(a) Each Qualified Participant shall be permitted to elect
within 90 days after the last day of each Plan Year during the
Participant's Qualified Election Period to receive a cash distribution
from the Plan not to exceed 25% of the value of the Participant's
Account balance attributable to Common Stock which was acquired by the
Plan after December 31, 1986. Within 90 days after the close of the
last Plan Year in the Participant's Qualified Election Period, a
Qualified Participant may elect to receive a cash distribution from the
Plan not to exceed 50% of the value of such Account balance.
(b) The Participant's election shall be made in accordance
with the procedures established by the Committee and shall be effective
no later than 180 days after the close of the Plan Year to which the
election applies. The Plan shall distribute (notwithstanding Section
409(d) of the Code) the portion of the Participant's Account that is
covered by the election within 90 days after the last day of the period
during which the election can be made. This Section 7.2 shall apply
notwithstanding any other provision of the Plan other than such
provisions as may require the consent of the Participant to a
distribution with a present value in excess of $3,500. If the
Participant does not consent to a distribution with a present value in
excess of $3,500 under this Section 7.2, such amount shall be retained
in the Plan and the Plan shall be deemed to have satisfied the
diversification requirements of Section 401(a)(28)(B) of the Code.
7.3 In-Service Withdrawals. Subject to the requirements of Section
8.14, a Participant who is employed by an Affiliated Employer may at any time
elect to have distributed to him the cash value of a specific number of whole
shares of Common Stock, provided such Common Stock shall have been credited to
the Participant's Account for a period of at least 84 months. Such shares of
Common Stock shall be distributed not prior to the first
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day of the 85th month following the month in which any full shares of Common
Stock shall have been credited to his Account. The election shall be made in
accordance with the procedures established by the Committee.
Any such withdrawal shall be subject to the following requirements:
(a) a withdrawal must be for a specific number of whole
shares or the value of a specific number of whole shares of
Common Stock;
(b) the specific number of shares requested must equal at
least the lesser of 20 shares or the total number of whole shares
available for withdrawal from the Participant's Account; and
(c) a withdrawal shall be made in the form of cash, provided
that with respect to any distribution which is attributable to full
shares of Common Stock, the Participant shall have the right to demand
that such portion of the distribution be made in the form of Common
Stock.
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ARTICLE VIII
DISTRIBUTIONS TO PARTICIPANTS
8.1 Vesting. All amounts credited to the Account of a
Participant under the Plan shall at all times be fully vested and
nonforfeitable.
8.2 Distribution upon Retirement.
(a) If a Participant retires pursuant to his Affiliated
Employer's pension plan, the entire balance credited to his Account
shall be payable to him in the manner and time for commencement of
benefits requested by the Participant pursuant to Sections 8.7 and 8.8.
(b) Notwithstanding a Participant's election to defer receipt
of benefits under (a) above, the Committee shall direct payment in a
lump sum to such Participant if the balance of his Account
(attributable to Employing Company and Employee contributions) does not
exceed $3,500 in accordance with the requirements of Code Section
411(a)(11). The Committee shall not cash-out any Participant whose
benefits exceed $3,500 without the written consent of the Participant.
8.3 Distribution upon Death. If a Participant's employment
with the Affiliated Employers is terminated by reason of death, the
entire balance credited to the Participant's Account shall be distributed as
soon as practicable to the Participant's Beneficiary or Beneficiaries in a lump
sum pursuant to Section 8.9(b).
8.4 Designation of Beneficiary in the Event of Death. A
Participant may designate a Beneficiary or Beneficiaries (who may
be designated contingently) to receive all or part of the amount
credited to his Account in case of his death before his receipt of
all of his benefits under the Plan, provided that the Beneficiary
of a married Participant shall be the Participant's Surviving
Spouse, unless such Surviving Spouse shall consent in a writing
witnessed by a notary public, which writing acknowledges the effect
of the Participant's designation of a Beneficiary other than such
Surviving Spouse. However, if such Participant establishes to the
satisfaction of the Committee that such written consent may not be
obtained because the Surviving Spouse cannot be located or because
of such other circumstances as the Secretary of the Treasury may by
regulations prescribe, a designation by such Participant without
the consent of the Surviving Spouse shall be valid.
Any consent necessary under this Section 8.4 shall be valid and
effective only with respect to the Surviving Spouse who signs the consent or, in
the event of a deemed consent, only with respect to a designated Surviving
Spouse.
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A designation of Beneficiary may be revoked by the Participant without
the consent of any Beneficiary (or the Participant's Surviving Spouse) at any
time before the commencement of the distribution of benefits. A Beneficiary
designation or change or revocation of a Beneficiary designation shall be made
in accordance with the procedures established by the Committee.
If no designated Beneficiary shall be living at the death of the
Participant and/or such Participant's Beneficiary designation is not valid and
enforceable under applicable law or the procedures of the Committee, such
Participant's Beneficiary of Beneficiaries shall be the person or persons in the
first of the following classes of successive preference, if then living:
(a) the Participant's spouse on the date of his death,
(b) the Participant's children, equally,
(c) the Participant's parents, equally,
(d) the Participant's brothers and sisters, equally, or
(e) the Participant's executors or administrators.
Payment to such one or more persons shall completely discharge the Plan and the
Trustee with respect to the amount so paid.
8.5 Distribution upon Disability. If a Participant's employment with
the Affiliated Employers is terminated by reason of his total and permanent
disability, as determined by the Social Security Administration, such disabled
Participant shall be entitled to receive the full value of his Account
immediately following the date the Social Security Administration determines the
Participant is totally and permanently disabled, in a single lump sum payment.
The Participant or his legal representative shall request the time for
commencement of benefits pursuant to Section 8.8. Notwithstanding the foregoing,
effective July 1, 1995, the Committee shall direct payment in a single lump sum
to such Participant or his legal representative if the balance of the
Participant's Account does not exceed $3,500 in accordance with the requirements
of Code Section 411(a)(11).
8.6 Distribution upon Termination of Employment.
(a) If a Participant's employment with the Affiliated
Employers is terminated for any reason other than in accordance with
Sections 8.2, 8.3, or 8.5, he shall become entitled to payment of the
full value of his Account as hereinafter provided.
(b) Upon termination of employment with the Affiliated
Employers, the Participant may request a distribution in a
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single lump sum of the full value of his Account. Alternatively, such
Participant may elect to defer receipt of the full value of his Account
until a time not later than the time specified in Section 8.8 below.
Any deferred distribution shall commence as soon as practicable after
the Valuation Date selected by the Participant.
(c) Notwithstanding a Participant's election to defer receipt
of benefits under (b) above, the Committee shall direct payment in a
lump sum to such Participant if the balance of his Account
(attributable to Employing Company and Employee contributions) as of
the last Valuation Date in the month in which such Participant
terminates employment with the Affiliated Employers does not exceed
$3,500 in accordance with Code Section 411(a)(11). The Committee shall
not cash-out any Participant whose benefits exceed $3,500 without the
written consent of the Participant.
8.7 Property Distributed/Method of Payment.
(a) A Participant separating from service in accordance with
Section 8.2 shall elect the manner in which the Common Stock credited
to his Account is distributed and a time for commencement of the
distribution as provided hereinafter. The election by the Participant
shall be made in accordance with the procedures established by the
Committee. The Participant shall select one of the following
alternative forms of distribution of his Account:
(1) A lump sum distribution; or
(2) Annual installments for a period not to exceed
five years or, in the case of a Participant whose Account
exceeds $500,000, five years plus one additional year (but not
more than five additional years) for each $100,000 or fraction
thereof by which such Account exceeds $500,000. The dollar
amounts contained in this paragraph (2) shall be adjusted by
the Secretary of the Treasury pursuant to Section 409(o)(2) of
the Code.
(b) All lump sum distributions under the Plan shall be made in
cash, provided that a Participant shall have the right to request that
such distribution be made in full shares of Common Stock, except that
fractional shares shall be converted to and paid in cash, and declared
but unpaid cash dividends shall be paid in cash. If any additional
shares of Common Stock are subsequently allocated to the Participant's
Account, such shares shall be distributed to the Participant or his
Beneficiary within 60 days following the date on which such additional
allocation is made.
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(c) All installment distributions under this Section 8.7 shall
be made in cash, unless the Participant shall request that such
distribution be made in full shares of Common Stock and cash for any
fractional shares and declared but unpaid cash dividends. If a
Participant elects installment payments, any additional shares of
Common Stock allocated to his Account shall be added to the
undistributed balance of such Account and be distributed thereafter in
the manner the Participant has elected.
8.8 Commencement of Benefits.
(a) Unless the Participant elects to have payment begin at a
later date, payment of benefits to the Participant shall begin at the
Participant's election, in accordance with the procedures established
by the Committee, not later than 60 days after the last day of the Plan
Year in which the latest of the following occurs:
(1) the Participant attains the earlier of age 65
or his Normal Retirement Date;
(2) the Participant's 10th anniversary of
participation under the Plan; or
(3) the Participant's separation from service.
(b) Notwithstanding anything in the Plan to the contrary, the
payment of benefits to a Participant shall begin not later than April 1
of the calendar year following the calendar year in which the
Participant attains age 70-1/2, regardless of the Participant's actual
retirement.
Any distribution made under this Plan shall be made in accordance with
the minimum distribution requirements of Code Section 401(a)(9), including the
incidental death benefits requirements under Code Section 401(a)(9)(G) and the
Treasury Regulations thereunder.
8.9 Distribution upon Death.
(a) If the Participant dies before his entire nonforfeitable
interest has been distributed to him, the remaining portion of such
interest shall be distributed in a single lump sum to his Beneficiary.
(b) If the Participant dies before the distribution of his
nonforfeitable interest has begun, the entire interest shall be
distributed in a single lump sum to his Beneficiary within 60 days
following the Company's receipt of notification of the death of such
Participant.
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8.10 Adjustments for Deferred Accounts or Installment Payments. If the
distribution of benefits to a Participant will either be paid in installments or
the Participant elects to postpone distribution of his benefits payable in a
lump sum, the Participant's Account shall remain in the Trust Fund and shall
continue to participate in the valuations as provided in Sections 6.6 and 6.7
until fully distributed.
8.11 Transfers between Employing Companies. A transfer by a Participant
from one Employing Company to another Employing Company shall not affect his
participation in the Plan. A transfer by a Participant from an Employing Company
to an Affiliated Employer that is not an Employing Company shall not be deemed
to be a termination of employment with an Employing Company.
8.12 Distribution to Alternate Payees. If the Participant's Account
under the Plan shall become subject to any domestic relations order which (a) is
a qualified domestic relations order satisfying the requirements of Section
414(p) of the Code and (b) requires the immediate distribution in a single lump
sum of the entire portion of the Participant's Account required to be segregated
for the benefit of an alternate payee, then the entire interest of such
alternate payee shall be distributed in a single lump sum within 90 days
following the Employing Company's notification to the Participant and the
alternate payee that the domestic relations order is qualified under Section
414(p) of the Code, or as soon as practicable thereafter. Such distribution to
an alternate payee shall be made even if the Participant has not separated from
the service of the Affiliated Employers. Any other distribution pursuant to a
qualified domestic relations order shall not be made earlier than the
Participant's termination of service or his attainment of age 50, if earlier,
and shall not commence later than the date the Participant's (or his
Beneficiary's) benefit payments otherwise commence. Such distribution to an
alternate payee shall be made only in a manner permitted under Section 8.7 of
the Plan.
8.13 Requirement for Direct Rollovers. Notwithstanding any provision of
the Plan to the contrary that would otherwise limit a Distributee's election
under this Article VIII, a Distributee may elect, at the time and in the manner
prescribed by the Committee, to have any portion of an Eligible Rollover
Distribution paid directly to an Eligible Retirement Plan specified by the
Distributee in a Direct Rollover.
8.14 Consent and Notice Requirements. If the value of the vested
portion of a Participant's Account derived from Employing Company and Employee
contributions exceeds $3,500 determined in accordance with the requirements of
Code Section 411(a)(11), the Participant must consent to any distribution of
such vested account balance prior to his Normal Retirement Date. The consent of
the Participant shall be obtained within the ninety-day period ending
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on the first day of the first period for which an amount is payable as an
annuity or in any other form under this Plan.
The Committee shall notify the Participant of the right to defer any
distribution until the Participant's Account balance is no longer immediately
distributable. Such notification shall include a general description of the
material features and an explanation of the relative values of the operational
forms of benefit available under the Plan in a manner that would satisfy the
notice requirements of Section 417(a)(3) of the Code; such notification shall be
provided no less than 30 days and no more than 90 days prior to the annuity
starting date.
Distributions may commence less than 30 days after the notice required
under Section 1.411(a)-11(c) of the Treasury Regulations is given, provided
that:
(a) the Committee informs the Participant that the Participant
has a right to a period of at least 30 days after receiving the notice
to consider the decision of whether or not to elect a distribution and
a particular distribution option, and
(b) the Participant, after receiving the notice,
affirmatively elects a distribution.
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ARTICLE IX
ADMINISTRATION
9.1 Membership of Committee. The Plan shall be administered by the
Committee, which shall consist of the representative of The Southern Company and
the representative of each Employing Company on The Southern Company Human
Resources Committee, except Southern Electric International, Inc. The Committee
shall be chaired by the representative of The Southern Company and may select a
Secretary (who may, but need not, be a member of the Committee) to keep its
records or to assist it in the discharge of its duties.
9.2 Acceptance and Resignation. Any person appointed to be a member of
the Committee shall signify his acceptance in writing to the Chairman of the
Committee. Any member of the Committee may resign by delivering his written
resignation to the Committee and such resignation shall become effective upon
delivery or upon any later date specified therein.
9.3 Transaction of Business. A majority of the members of the Committee
at the time in office shall constitute a quorum for the transaction of business
at any meeting. Any determination or action of the Committee may be made or
taken by a majority of the members present at any meeting thereof or without a
meeting by a resolution or written memorandum concurred in by a majority of the
members then in office.
9.4 Responsibilities in General. The Committee shall administer the
Plan and shall have the discretionary authority, power, and the duty to take all
actions and to make all decisions necessary or proper to carry out the Plan and
to control and manage the operation and administration of the Plan. The
Committee shall have the discretion to interpret the Plan, including any
ambiguities herein, and to determine the eligibility for benefits under the
Plan. The determination of the Committee as to any question involving the
general administration and interpretation of the Plan shall be final,
conclusive, and binding on all persons, except as otherwise provided herein or
by law, and may be relied upon by the Company, all Employing Companies, the
Trustee, Participants, and their Beneficiaries. Any discretionary actions to be
taken under the Plan by the Committee with respect to Employees and Participants
and with respect to benefits shall be uniform in their nature and applicable to
all persons similarly situated.
9.5 Committee as Named Fiduciary. For the purpose of compliance with
the provisions of ERISA, the Committee shall be deemed the administrator of the
Plan, as the term "administrator" is defined in ERISA, and the Committee shall
be, with respect to the Plan, a named fiduciary as that term is defined in
ERISA. For the purpose of carrying out its duties, the Committee may, in its
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discretion, allocate its responsibilities under the Plan among its members and
may, in its discretion, designate (in writing or otherwise) persons other than
members of the Committee to carry out such responsibilities of the Committee
under the Plan as it may see fit.
9.6 Rules for Plan Administration. The Committee may make and enforce
rules and regulations for the administration of the Plan consistent with the
provisions thereof and may prescribe the use of such forms or procedures as it
shall deem appropriate for the administration of the Plan.
9.7 Employment of Agents. The Committee may employ independent
qualified public accountants, as such term is defined in ERISA, who may be
accountants to The Southern Company and any Affiliated Employer, legal counsel
who may be counsel to The Southern Company and any Affiliated Employer, other
specialists, and other persons as the Committee deems necessary or desirable in
connection with the administration of the Plan. The Committee and any person to
whom it may delegate any duty or power in connection with the administration of
the Plan, the Company and the officers and directors thereof shall be entitled
to rely conclusively upon and shall be fully protected in any action omitted,
taken, or suffered by them in good faith in reliance upon any independent
qualified public accountant, counsel, or other specialist or other person
selected by the Committee, or in reliance upon any tables, evaluations,
certificates, opinions, or reports which shall be furnished by any of them or by
the Trustee.
9.8 Co-Fiduciaries. It is intended that, to the maximum extent
permitted by ERISA, each person who is a fiduciary (as that term is defined in
ERISA) with respect to the Plan shall be responsible for the proper exercise of
his own powers, duties, responsibilities, and obligations under the Plan and the
Trust, as shall each person designated by any fiduciary to carry out any
fiduciary responsibility with respect to the Plan or the Trust. No fiduciary or
other person to whom fiduciary responsibilities are allocated shall be liable
for any act or omission of any other fiduciary or of any other person delegated
to carry out any fiduciary or other responsibility under the Plan or the Trust.
9.9 General Records. The Committee shall maintain or cause to be
maintained separate Accounts (and any separate subaccounts) which accurately
reflect the interests of the Participants as provided for in Section 6.1, and
shall maintain or cause to be maintained all necessary books of account and
records with respect to the administration of the Plan. The Committee shall mail
or cause to be mailed to Participants reports to be furnished to Participants in
accordance with the Plan or as may be required by ERISA. Any notices, reports,
or statements to be given, furnished, made, or delivered to a Participant shall
be deemed duly given, furnished, made, or delivered when addressed to the
Participant and
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delivered to the Participant in person or mailed by ordinary mail to his address
last communicated to the Committee (or its delegate) or of his Employing
Company.
9.10 Liability of the Committee. In administering the Plan, except as
may be prohibited by ERISA, neither the Committee nor any person to whom it may
delegate any duty or power in connection with administering the Plan shall be
liable for any action or failure to act except for its or his own gross
negligence or willful misconduct, nor for the payment of any amount under the
Plan, nor for any mistake of judgment made by him or on his behalf as a member
of the Committee; nor for any action, failure to act, or loss unless resulting
from his own gross negligence or willful misconduct, nor for the neglect,
omission, or wrongdoing of any other member of the Committee. No member of the
Committee shall be personally liable under any contract, agreement, bond, or
other instrument made or executed by him or on his behalf as a member of the
Committee.
9.11 Reimbursement of Expenses and Compensation of Committee. Members
of the Committee shall be reimbursed by the Company for expenses they may
individually or collectively incur in the performance of their duties. Each
member of the Committee who is a full-time employee of the Company or of any
Employing Company shall serve without compensation for his services as such
member; each other member of the Committee shall receive such compensation, if
any, for his services as the Board of Directors may fix from time to time.
9.12 Expenses of Plan and Trust Fund. The expenses of establishment and
administration of the Plan and the Trust Fund, including all fees of the
Trustee, auditors and counsel, shall be paid by the Company or the Employing
Companies. Notwithstanding the foregoing, certain administrative expenses may be
paid from the Trust Fund unless otherwise paid by the Company or the Employing
Companies to the extent provided in the Trust Agreement. Any expenses directly
related to the investments of the Trust Fund, such as stock transfer taxes,
brokerage commissions, or other charges incurred in the acquisition or
disposition of such investments, shall be paid from the Trust Fund and shall be
deemed to be part of the cost of such securities or deducted in computing the
proceeds therefrom, as the case may be. Taxes, if any, on any assets held or
income received by the Trustee and transfer taxes on the transfer of Common
Stock from the Trustee to a Participant or his Beneficiary shall be charged
appropriately against the Accounts of Participants as the Committee shall
determine. Any expenses paid by the Company pursuant to Section 9.11 and this
section shall be subject to reimbursement by other Employing Companies in an
amount equal to their proportionate shares of such expenses as determined by the
Committee.
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9.13 Responsibility for Funding Policy. The Pension Fund Investment
Review Committee of The Southern Company System shall have responsibility for
providing a procedure for establishing and carrying out a funding policy and
method for the Plan consistent with the objectives of the Plan and the
requirements of Title I of
ERISA.
9.14 Code Section 411(d)(6) Protected Benefits. Notwithstanding
anything to the contrary in this Plan, any provisions added to this Plan to
effectuate the merger of the SEPCO ESOP into this Plan shall not be interpreted
so as to decrease a Participant's accrued benefit except to the extent permitted
under Section 412(c)(8) of the Code, and such provisions shall not reduce or
eliminate Code Section 411(d)(6) protected benefits determined immediately prior
to January 1, 1993. The Committee shall disregard such provision in the Plan to
the extent that application of such would fail to satisfy this paragraph. If the
Committee disregards any portion of the Plan because it would eliminate a
protected benefit, the Committee shall maintain a schedule of any such impacted
early retirement option or other optional forms of benefit and the Plan must
continue such for the affected Participants.
9.15 Management of Assets. The Committee shall not have responsibility
with respect to the control or management of the assets of the Plan. The Trustee
shall have the sole responsibility for the administration of the assets of the
Plan as provided in the Trust Agreement.
9.16 Notice and Claims Procedure. Consistent with the
requirements of ERISA and the regulations thereunder of the
Secretary of Labor from time to time in effect, the Committee
shall:
(a) provide adequate notice in writing to any Participant or
Beneficiary whose claim for benefits under the Plan has been denied,
setting forth specific reasons for such denial, written in a manner
calculated to be understood by such Participant or Beneficiary, and
(b) afford a reasonable opportunity to any Participant or
Beneficiary whose claim for benefits has been denied for a full and
fair review of the decision denying the claim.
9.17 Bonding. Unless Otherwise determined by the Board of Directors or
required by law, no member of the Committee shall be required to give any bond
or other security in any jurisdiction.
9.18 Multiple Fiduciary Capacities. Any person or group of
persons may serve in more than one fiduciary capacity with respect
to the Plan, and any fiduciary with respect to the Plan may serve
as a fiduciary with respect to the Plan in addition to being an
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officer, employee, agent, or other representative of a party in interest, as
that term is defined in ERISA.
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ARTICLE X
THE TRUST FUND AND TRUSTEE
10.1 Trustee. The Company has entered into a Trust Agreement with the
Trustee to hold the funds necessary to provide the benefits set forth in the
Plan. The Company may remove the Trustee or appoint a successor trustee at any
time upon 60 days notice in writing to the Trustee and the Committee. Any Trust
Agreement may be amended by the Company from time to time in accordance with its
terms. Any Trust Agreement shall provide, among other things, for a Trust Fund.
The Trust Fund shall be administered by the Trustee to receive contributions, to
hold, invest, and reinvest all property and funds of the Trust Fund, and to
distribute benefits to eligible Participants and Beneficiaries.
10.2 Duties of the Trustee. The Trustee shall have sole responsibility
for the investment and safekeeping of the assets of the Trust Fund and shall
have no responsibility for the operation or administration of the Plan, except
as expressly provided herein.
10.3 Diversion. At no time shall any part of the corpus or income of
the Trust Fund be used for or diverted to purposes other than for the exclusive
benefit of Participants or their Beneficiaries; provided, however, that
contributions may be returned to the Employing Company in accordance with the
provisions of Section 4.5.
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ARTICLE XI
AMENDMENT AND TERMINATION
11.1 Amendment of the Plan. The Plan may be amended or modified by the
Board of Directors pursuant to its written resolutions at any time and from time
to time; provided, however, that no such amendment or modification shall make it
possible for any part of the corpus or income of the Trust Fund to be used for
or diverted to purposes other than for the exclusive benefit of Participants or
their Beneficiaries under the Plan, including such part as is required to pay
taxes and administration expenses of the Plan. The Plan may also be amended or
modified by the Committee (a) if such amendment or modification does not involve
a substantial increase in cost to any Employing Company, or (b) as may be
necessary, proper, or desirable in order to comply with laws or regulations
enacted or promulgated by any federal or state governmental authority and to
maintain the qualification of the Plan under Sections 401(a) and 501(a) of the
Code and the applicable provisions of ERISA.
Notwithstanding the foregoing, the formula in Section 6.2 of this Plan
under which shares of Common Stock are allocated to the Accounts of Plan
Participants shall not be amended more frequently than once every six months.
No amendment to the Plan shall have the effect of decreasing a
Participant's vested interest in his Account, determined without regard to such
amendment, as of the later of the date such amendment is adopted or the date it
becomes effective. In addition, if the vesting schedule of the Plan is amended,
any Participant who has completed at least three (3) Years of Service and whose
vested interest is at any time adversely affected by such amendment may elect to
have his vested interest determined without regard to such amendment during the
election period defined under Section 411(a)(10) of the Code. Finally, no
amendment shall eliminate an optional form of benefit in violation of Code
Section 411(d)(6).
11.2 Termination of the Plan. It is the intention of the Employing
Companies to continue the Plan indefinitely. However, the Board of Directors
pursuant to its written resolutions may at any time and for any reason suspend
or terminate the Plan or suspend or discontinue the making of contributions to
the Plan by all Employing Companies. Any Employing Company may, by action of its
board of directors and approval by the Board of Directors suspend or terminate
the making of contributions to the Plan by such Employing Company.
In the event of termination of the Plan or partial termination or upon
complete discontinuance of contributions under the Plan by all Employing
Companies or by any one Employing Company, the amount
36
<PAGE>
to the credit of the Account of each Participant whose Employing Company shall
be affected by such termination or discontinuance shall be determined as of the
next Valuation Date and shall be distributed to him or his Beneficiary
thereafter at such time or times and in such nondiscriminatory manner as is
determined by the Committee. Notwithstanding the above, so long as a Participant
continues to be an Employee, no distribution may be made of shares of Common
Stock which have been allocated to the Participant's Account for a period of
less than 84 months commencing after the month in which such allocation
occurred, unless such distribution is pursuant to Section 7.2 of the Plan or on
account of termination of the Plan after December 31, 1984.
11.3 Merger or Consolidation of the Plan. The Plan shall not be merged
or consolidated with nor shall any assets or liabilities thereof be transferred
to any other plan unless each Participant of the Plan would (if the Plan then
terminated) receive a benefit immediately after the merger, consolidation, or
transfer which is equal to or greater than the benefit he would have been
entitled to receive immediately prior to the merger, consolidation, or transfer
(if the Plan had then terminated).
37
<PAGE>
ARTICLE XII
TOP-HEAVY PROVISIONS
12.1 Top-Heavy Plan Requirements. For any Plan Year the Plan
shall be determined to be a top-heavy plan, the Plan shall provide
the minimum allocation requirement of Section 12.3.
12.2 Determination of Top-Heavy Status.
(a) For any Plan Year commencing after December 31, 1983, the
Plan shall be determined to be a top-heavy plan, if, as of the
Determination Date, the sum of the Aggregate Accounts of Key Employees
under this Plan exceeds 60% of the Aggregate Accounts of all Employees
entitled to participate in this Plan.
(b) For any Plan Year commencing after December 31, 1983, the
Plan shall be determined to be a super-top-heavy plan, if, as of the
Determination Date, the sum of the Aggregate Accounts of Key Employees
under this Plan exceeds 90% of the Aggregate Accounts of all Employees
entitled to participate in this Plan.
(c) In the case of a Required Aggregation Group, each plan in
the group will be considered a top-heavy plan if the Required
Aggregation Group is a Top-Heavy Group. No plan in the Required
Aggregation Group will be considered a top-heavy plan if the
Aggregation Group is not a Top-Heavy Group.
In the case of a Permissive Aggregation Group, only a plan
that is part of the Required Aggregation Group will be considered a
top-heavy plan if the Permissive Aggregation Group is a Top-Heavy
Group. A plan that is not part of the Required Aggregation Group but
that has nonetheless been aggregated as part of the Permissive
Aggregation Group will not be considered a top-heavy plan even if the
Permissive Aggregation Group is a Top-Heavy Group.
(d) For purposes of this Article XII, if any Employee is a
non-Key Employee for any Plan Year, but such Employee was a Key
Employee for any prior Plan Year, such Employee's Present Value of
Accrued Retirement Income and/or Aggregate Account balance shall not be
taken into account for purposes of determining whether this Plan is a
top-heavy or super-top- heavy plan (or whether any Aggregation Group
which includes this Plan is a Top-Heavy Group). In addition, for Plan
Years beginning after December 31, 1984, if an Employee or former
Employee has not performed any services for any Employing Company
maintaining the Plan at any time during the five-year period ending on
the Determination Date, the Aggregate Account and/or Present Value of
Accrued Retirement Income shall be
38
<PAGE>
excluded in determining whether this Plan is a top-heavy or
super-top-heavy plan.
(e) Only those plans of the Affiliated Employers in which the
Determination Dates fall within the same calendar year shall be
aggregated in order to determine whether such plans are top-heavy
plans.
12.3 Minimum Allocation for Top-Heavy Plan Years.
(a) Notwithstanding anything herein to the contrary, for any
top-heavy Plan Year, the Employing Company contribution allocated to
the Account of each non-Key Employee shall be an amount not less than
the lesser of: (1) 3% of such Participant's compensation for that Plan
Year, or (2) a percentage of that Participant's compensation not to
exceed the percentage at which contributions are made under the Plan
for the Key Employee for whom such percentage is highest for that Plan
Year.
(b) For purposes of the minimum allocation of Section 12.3(a),
the percentage allocated to the Account of any Key Employee shall be
equal to the ratio of the Employing Company contributions allocated on
behalf of such Key Employee divided by the compensation of such Key
Employee for that Plan Year.
(c) For any top-heavy Plan Year, the minimum allocations of
Section 12.3(a) shall be allocated to the Accounts of all non-Key
Employees who are Participants and who are employed by the Affiliated
Employers on the last day of the Plan Year.
(d) Notwithstanding the foregoing, in any Plan Year in which a
non-Key Employee is a Participant in both this Plan and a defined
benefit plan, and both such plans are top-heavy plans, the Affiliated
Employers shall not be required to provide a non-Key Employee with both
the full separate minimum defined benefit and the full separate defined
contribution plan allocations. Therefore, if a non-Key Employee is
participating in a defined benefit plan maintained by the Affiliated
Employers and the minimum benefit under Code Section 416(c)(1) is
provided the non-Key Employee under such defined benefit plan, the
minimum allocation provided for above shall not be applicable, and no
minimum allocation shall be made on behalf of the non-Key Employee.
Alternatively, the Employing Company may satisfy the minimum allocation
requirement of Code Section 416(c)(2) for the non-Key Employee by
providing any combination of benefits and/or contributions that satisfy
the safe harbor rules of Treasury Regulation Section 1.416-1(M-12).
39
<PAGE>
12.4 Adjustments to Maximum Benefit Limits for Top-Heavy
Plans.
(a) In the case of an Employee who is a participant in a
defined benefit plan and a defined contribution plan maintained by the
Affiliated Employers, and such plans as a group are determined to be
top heavy for any limitation year beginning after December 31, 1983,
"1.0", shall be substituted for "1.25" in each place it appears in the
denominators of the Defined Benefit Plan Fraction and Defined
Contribution Plan Fraction, unless the extra minimum benefit is
provided pursuant to Section 12.4(b) below. Super-top-heavy plans and
plans in a Super-Top-Heavy Group shall be required at all times to
substitute "1.0" for "1.25" in the denominator of each plan fraction.
(b) If a Key Employee is a participant in both a defined
benefit plan and a defined contribution plan that are both part of a
Top-Heavy Group (but neither of such plans is a super-top-heavy plan),
the Defined Benefit Plan Fraction and the Defined Contribution Plan
Fraction shall remain unchanged, provided the Account of each non-Key
Employee who is a Participant receives an extra allocation (in addition
to the minimum allocation in Section 12.3(a)) equal to not less than 1%
of such non-Key Employee's compensation.
(c) For purposes of this Section 12.4, if the sum of the
Defined Benefit Plan Fraction and the Defined Contribution Plan
Fraction shall exceed 1.0 in any Plan Year for any Participant in this
Plan, the Affiliated Employers shall eliminate any amounts in excess of
the limits set forth in Section 6.3(b), pursuant to Section 6.5 of the
Plan.
40
<PAGE>
ARTICLE XIII
GENERAL PROVISIONS
13.1 Plan Not an Employment Contract. The Plan shall not be deemed to
constitute a contract between an Affiliated Employer and any Employee, nor shall
anything herein contained be deemed to give any Employee any right to be
retained in the employ of an Employing Company, or to interfere with the right
of an Employing Company to discharge any Employee at any time and to treat him
without regard to the effect which such treatment might have upon him as a
Participant.
13.2 Non-Alienation or Assignment. Except as may be otherwise permitted
or required by law, no right or interest in the Plan of any Participant or
Beneficiary and no distribution or payment under the Plan to any Participant or
Beneficiary of a deceased Participant shall be subject in any manner to
anticipation, alienation, sale, transfer (except by death), assignment (either
at law or in equity), pledge, encumbrance, charge, attachment, garnishment,
levy, execution, or other legal or equitable process, whether voluntary or
involuntary, and any attempt to so anticipate, alienate, sell, transfer, assign,
pledge, encumber, charge, attach, garnish, levy, execute, or enforce any other
legal or equitable process against the same shall be void, nor shall any such
right, interest, distribution, or payment be in any way liable for or subject to
the debts, contracts, liabilities, engagements, or torts of any person entitled
to such right, interest, distribution, or payment. If any Participant or
Beneficiary is adjudicated bankrupt or purports to anticipate, alienate, sell,
transfer, assign, pledge, encumber, or charge any such right, interest,
distribution, or payment, voluntarily or involuntarily, or if any action shall
be taken which is in violation of the provisions of the immediately preceding
sentence, the Committee may hold or apply or cause to be held or applied such
right, interest, distribution, or payment or any part thereof to or for the
benefit of such Participant or Beneficiary in such manner as is in accordance
with applicable law.
Notwithstanding the above, the Committee and the Trustee shall comply
with any domestic relations order (as defined in Section 414(p)(1)(B) of the
Code) which is a qualified domestic relations order satisfying the requirements
of Section 414(p) of the Code. The Committee shall establish procedures for (a)
notifying Participants and alternate payees who have or may have an interest in
benefits which are the subject of domestic relations orders, (b) determining
whether such domestic relations orders are qualified domestic relations orders
under Section 414(p) of the Code, and (c) distributing benefits which are
subject to qualified domestic relations orders.
41
<PAGE>
13.3 Payments to Minors and Others. If the Committee determines that
any person entitled to a distribution or payment from the Trust Fund under the
Plan is an infant or incompetent or is unable to care for his affairs by reason
of physical or mental disability, it may cause all distributions or payments
thereafter becoming due to such person to be made to any other person for his
benefit, without responsibility to follow the application of payments so made.
Payments made pursuant to this provision shall completely discharge the Company,
the Trustee, and the Committee with respect to the amounts so paid.
13.4 Source of Benefits. The Trust Fund established under the Plan
shall be the sole source of the payments or distributions to be made in
accordance with the Plan. No persons shall have any rights under the Plan with
respect to the Trust Fund, or against the Trustee or any Employing Company,
except as specifically provided herein.
13.5 Unclaimed Benefits. If the Committee is unable, within five (5)
years after any distribution becomes payable to a Participant or Beneficiary, to
make or direct payment to the person entitled thereto because the identity or
whereabouts of such person cannot be ascertained, notwithstanding the mailing of
due notice to such person at his last known address as indicated by the records
of either the Committee or his Employing Company, then such benefit or
distribution will be disposed of as follows:
(a) If the whereabouts of the Participant is unknown to
the Committee, distribution will be made to the Participant's
Beneficiary or Beneficiaries.
Payment to such one or more persons shall completely discharge
the Company, the Trustee, and the Committee with respect to the amounts
so paid.
(b) If none of the persons described in (a) above, can be
located, then the benefit payable under the Plan shall be forfeited and
shall be applied to reduce future Employing Company contributions.
Notwithstanding the foregoing sentence, such benefit shall be
reinstated if a claim is made by the Participant or Beneficiary for the
forfeited benefit.
13.6 Governing Law. The provisions of the Plan and the Trust shall be
construed, administered, and enforced in accordance with the laws of the State
of Georgia, except to the extent such laws are preempted by the laws of the
United States.
42
<PAGE>
IN WITNESS WHEREOF, the Company has caused this amendment and
restatement of the Plan to be executed this _____ day of _______________, 1995
to be effective as provided herein.
SOUTHERN COMPANY SERVICES, INC.
By:
Its:
(CORPORATE SEAL)
ATTEST:
By:
Its:
43
<PAGE>
THE SOUTHERN COMPANY
EMPLOYEE STOCK OWNERSHIP PLAN
APPENDIX A
The Employing Companies as of April 1, 1995 are:
Alabama Power Company Georgia Power Company Gulf
Power Company Mississippi Power Company Savannah
Electric and Power Company Southern Company Services,
Inc.
Southern Communications Services, Inc.,
Southern Development and Investment Group, Inc.
Southern Electric International, Inc.
Southern Nuclear Operating Company, Inc.
44
<PAGE>
FIRST AMENDMENT TO THE SOUTHERN COMPANY
EMPLOYEE STOCK OWNERSHIP PLAN
WHEREAS, the Board of Directors of Southern Company Services, Inc. (the
"Company") heretofore adopted the amendment and restatement of The Southern
Company Employee Stock Ownership Plan (the "Plan"), effective as of April 1,
1995; and
WHEREAS, the Board of Directors of the Company desires to amend the
Plan in order to change the composition of the membership of the Committee
appointed to serve as plan administrator; and
WHEREAS, the Board of Directors of the Company is authorized pursuant
to Section 11.1 of the Plan to amend the Plan at any time.
NOW, THEREFORE, effective as of August 1, 1995, the Board of Directors
of the Company hereby amends the Plan as follows:
I.
Amend Section 9.1 of the Plan by deleting said Section in its entirety
and substituting the following in lieu thereof:
9.1 Membership of Committee. The Plan shall be administered by
the Committee, which shall consist of the individuals then serving in
the positions of Director, System Compensation and Benefits of The
Southern Company; Vice-President, Human Resources of The Southern
Company; and Comptroller of The Southern Company or any other position
or positions that succeed to the duties of any of the foregoing
positions. The Committee shall be chaired by the Vice-President, Human
Resources of The Southern Company and may select a Secretary (who may,
but need not, be a member of the Committee) to keep its records or to
assist it in the discharge of its duties.
II.
Except as amended herein by this First Amendment, the Plan shall remain
in full force and effect as amended and restated by the Company prior to the
adoption of this First Amendment.
<PAGE>
IN WITNESS WHEREOF, Southern Company Services, Inc., through its duly
authorized officers, has adopted this First Amendment to The Southern Company
Employee Stock Ownership Plan this ________ day of _____________________, 1996.
SOUTHERN COMPANY SERVICES,
INC.
By:
Title:
(CORPORATE SEAL)
ATTEST:
By:
Title:
Exhibit 10(a)68
FIRST AMENDMENT TO THE
PENSION PLAN
FOR EMPLOYEES OF
SOUTHERN COMPANY SERVICES, INC.
WHEREAS, the Board of Directors of Southern Company Services, Inc. (the
"Company") heretofore adopted the amendment and restatement of the Pension Plan
for Employees of Southern Company Services, Inc. (the "Plan"), effective January
1, 1989, in order to comply with the Internal Revenue Code of 1986, as amended
(hereinafter referred to as the "Code"); and
WHEREAS, the Pension Plan has also been adopted by, and covers the
eligible employees of, Southern Electric International, Inc. ("SEI"); and
WHEREAS, effective as of December 16, 1994, The Southern Company
acquired a power generation facility from Scott Paper Company ("Scott") located
in Mobile, Alabama; and
WHEREAS, SEI employed certain of Scott's salaried employees after the
acquisition; and
WHEREAS, the Company wishes to amend the Pension Plan to allow former
employees of Scott who are now salaried employees of SEI to immediately
participate in the Pension Plan, to recognize for benefit accrual and vesting
purposes under the Pension Plan service accrued under any Scott pension plan
maintained for such salaried employees, and to offset in the Pension Plan any
benefits these salaried employees may have accrued under such Scott pension
plans; and
WHEREAS, the Company is authorized pursuant to Section 13.1 of the Plan
to amend the Plan at any time.
NOW, THEREFORE, effective January 1, 1995, the Company hereby amends
the Plan by adding the following Article:
<PAGE>
I.
ARTICLE XVII
Special Provisions Concerning Certain Employees
of Southern Electric International, Inc.
17.1 Eligibility and Recognition of Service for Former Employees of
Scott Paper Company.
(a) Effective January 1, 1995, notwithstanding any other provision of
the Plan to the contrary, with respect to a former, non-collective bargaining
unit employee of Scott Paper Company who was employed by Southern Electric
International, Inc. as of December 17, 1994 as set forth on Schedule 2.1 of the
Employee Transition Agreement entered into by and among Mobile Energy Services
Company, Inc., Southern Electric International, Inc. and Scott Paper Company
(hereinafter referred to in this Article XVII as the "Scheduled Employee"),
(1) Such Scheduled Employee shall be eligible to
participate in the Plan effective January 1, 1995.
(2) Such Scheduled Employee, if and when he attains his Early
Retirement Date, Normal Retirement Date, or Deferred Retirement Date,
or terminates service for any other reason subject to the requirements
of Section 8.1 or 8.2, shall be entitled to receive Retirement Income
based on both his Accredited Service with the Employer and the service
accrued under the Scott Paper Company Pension Plan for Salaried
Employees (the "Scott Salaried Plan") which shall be treated as if
Accredited Service under this Plan. To calculate such Scheduled
Employee's Retirement Income, the Scheduled Employee's Accrued
Retirement Income, as determined in accordance with Section 5.1, shall
first be reduced by the Employee's accrued benefit in the Scott
Salaried Plan, determined as if he retired from Scott Paper Company at
his normal retirement age, as that term is defined in the Scott
Salaried Plan on December 17, 1994. Thereafter, such Employee's
Retirement Income shall be subject to applicable reductions, if any, in
accordance with Article V, Section 8.1 and Section 8.2, as appropriate.
2
<PAGE>
(3) For purposes of calculating such Scheduled Employee's
Social Security Offset under Section 5.4, the Social Security Offset
shall be determined by using the actual salary history of the Scheduled
Employee during his employment with the Employer, or an Affiliated
Employer, and Scott Paper Company. If the actual salary history is not
available from Scott Paper Company, such history shall be estimated in
accordance with Section 5.4(b)(1) and (2) of the Plan.
(4) For vesting purposes, such Scheduled Employee shall be
entitled to receive Vesting Years of Service as provided in Section
1.40 and, in addition, shall be entitled to vesting service equal to
the sum of the years of vesting service accrued under each defined
benefit pension plan maintained by Scott Paper Company in which such
Scheduled Employee participated.
II.
Except as amended herein by this First Amendment, the Plan shall remain
in full force and effect as amended and restated by the Company prior to the
adoption of this First Amendment.
IN WITNESS WHEREOF, Southern Company Services, Inc., through its duly
authorized officers, has adopted this First Amendment to the Pension Plan for
Employees of Southern Company Services, Inc. this ____ day of _________________,
1995, to be effective as stated herein.
SOUTHERN COMPANY SERVICES,
INC.
By:
Its:
ATTEST:
By:
Its:
[CORPORATE SEAL]
3
Exhibit 10(a)70
FIRST AMENDMENT
TO THE SOUTHERN COMPANY PERFORMANCE PAY PLAN
WHEREAS, the Board of Directors of Southern Company Services, Inc. (the
"Company") heretofore adopted the amendment and restatement of The Southern
Company Performance Pay Plan (the "Plan") effective as of January 1, 1991; and
WHEREAS, the Board of Directors of Gulf Power Company adopted the Gulf
Power Company Appliance Sales Performance Pay Plan to be effective as of January
1, 1992; and
WHEREAS, the Board of Directors of the Company desires to amend the
Plan to integrate the Gulf Power Company Appliance Sales Performance Pay Plan
with the Plan; and
WHEREAS, under Section 6.3 of the Plan, the Board of Directors has the
authority to amend the Plan at any time;
NOW THEREFORE, effective January 1, 1992, the Board of Directors hereby
amends the Plan as follows:
I.
Article IV of the Plan shall be amended by adding the following new
Section 4.5 thereto:
4.5 Notwithstanding the foregoing, the portion of the Incentive Pay
Award Pool otherwise distributable under the terms of this Plan on behalf of
Employees of Gulf Power Company shall be reduced by the amount necessary (the
"Necessary Amount") to fund the Gulf Power Company Appliance Sales Performance
Pay Plan (hereinafter referred to as the "Gulf Plan") as determined by the
executive committee (as that term is defined under the Gulf Plan) of the Gulf
Plan. Such Necessary Amount shall be distributed directly to the Gulf Plan from
the Incentive Pay Award Pool and shall be further distributed in accordance with
the terms of the Gulf Plan. The portion of the Incentive Pay Award Pool
otherwise payable on behalf of Employees of Gulf Power Company but not payable
to the Gulf Plan in accordance with this Section shall be subject to and
distributed in accordance with the provisions of this Plan. Except as provided
in Section 4.5(a) below, in no event shall a Gulf Power Company Appliance Sales
Department employee be entitled to receive a distribution from both this Plan
and the Gulf Plan.
(a) If an employee of the Gulf Power Company Appliance Sales Department
transfers between the Appliance Sales Department and another department of Gulf
Power Company or another Employing Company, such employee shall be entitled to
receive a pro-rata award under this Plan for that portion of the year in which
such employee participates in this Plan. The accrual rate of the pro-rata award
to be awarded to such employee under this Section 4.5(a) shall be determined in
accordance with Exhibit A of the Plan.
<PAGE>
(b) Position Level Values for employees transferring to or from the
Appliance Sales Department as described in Section 4.5(a) above shall be
prorated based upon the employee's time of participation in this Plan.
II.
Except as amended herein by this First Amendment, the Plan shall remain
in full force and effect as adopted and amended by the Company prior to the
adoption of this First Amendment.
IN WITNESS WHEREOF, Southern Company Services, Inc., through its duly
authorized officers, has adopted this First Amendment to The Southern Company
Performance Pay Plan this ____ day of ___________________, 1992, to be effective
January 1, 1992.
SOUTHERN COMPANY SERVICES, INC.
By:
Bob Andrews
Vice President
Attest:
By:
Tommy Chisholm
Secretary
[CORPORATE SEAL]
-2-
<PAGE>
SECOND AMENDMENT TO THE SOUTHERN COMPANY
PERFORMANCE PAY PLAN
WHEREAS, the Board of Directors of Southern Company Services, Inc.
(sometimes hereinafter referred to as the "Company") heretofore adopted the
Amendment and Restatement of The Southern Company Performance Pay Plan
(hereinafter referred to as the "Plan"), effective as of January 1, 1993; and
WHEREAS, the Plan provides for the payment of incentive pay awards by
funding units based in part on the attainment of goals established by such
funding units; and
WHEREAS, upon the transfer of employment by a participant within The
Southern Company, the Plan currently allocates funding responsibilities for
payment of incentive pay awards to the transferee funding unit; and
WHEREAS, the Company desires to clarify the allocation of such funding
responsibilities with respect to the functionalization of certain employees
which will be transferred to Southern Company Services, Inc. effective December
16, 1995; and
WHEREAS, the Company also desires to clarify the exclusion from
participation of certain employees who receive incentive compensation through
other means; and
WHEREAS, the Board of Directors of the Company is authorized pursuant
to Section 6.3 of the Plan to amend the Plan at any time.
NOW THEREFORE, the Board of Directors of the Company hereby amends the
Plan as follows:
1.
A new Section 2.1(b)(5) shall be included as set forth below:
Termination from participation in the Plan because the
requirements of Section 1.16 above are not met.
2.
A new Section 2.1(c) shall be included as set forth below:
Notwithstanding paragraphs (a) and (b) above, the following
employees of Alabama Power Company are ineligible to
participate in the Plan: Appliance Sales Persons with Job Code
4074 and Commissioned Commercial Account Managers with Job
Code 5867.
<PAGE>
3.
A new Section 3.2(d) shall be included as set forth below:
Notwithstanding Section 3.2(c) above, if a Non-Covered
Employee Participant transfers to Southern Company Services,
Inc. effective December 16, 1995 from an Operating Company,
other than Southern Company Services, Inc., as a result of the
functionalization of such Participant's job duties, the
Operating Company will fund such Participant's Incentive Pay
Award for the entire Performance Period which commenced
January 1, 1995. Southern Company Services, Inc. shall be
responsible for paying the Incentive Pay Award to the
Non-Covered Employee Participant in accordance with Section
4.1(c).
4.
Except as amended herein and by the First Amendment, the Plan shall
remain in full force and effect as amended and restated by the Company.
IN WITNESS WHEREOF, the Company through its duly authorized officers,
has adopted the Second Amendment to The Southern Company Performance Pay Plan
this ___ day of _________________, 1995.
SOUTHERN COMPANY SERVICES, INC.
By:
Its:
ATTEST:
By:
Its:
[CORPORATE SEAL]
2
Exhibit 10(a)71
SUPPLEMENTAL BENEFIT PLAN
FOR
ALABAMA POWER COMPANY
January 1, 1996
<PAGE>
SUPPLEMENTAL BENEFIT PLAN
FOR
ALABAMA POWER COMPANY
Page
ARTICLE I - PURPOSE AND ADOPTION OF PLAN . . . . . . . . . . . . . 1
1.1 Adoption . . . . . . . . . . . . . . . . . . . . 1
1.2 Purpose. . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II - DEFINITIONS . . . . . . . . . . . . . . . . . . . . . 1
2.1 Account. . . . . . . . . . . . . . . . . 1
2.2 Administrative Committee . . . . . . . . 2
2.3 Affiliated Employer. . . . . . . . . . . 2
2.4 Beneficiary. . . . . . . . . . . . . . . 2
2.5 Board of Directors . . . . . . . . . . . 2
2.6 Code . . . . . . . . . . . . . . . . . . 2
2.7 Common Stock . . . . . . . . . . . . . . 2
2.8 Company. . . . . . . . . . . . . . . . . 2
2.9 Deferred Compensation Plan . . . . . . . 2
2.10 Effective Date . . . . . . . . . . . . . 2
2.11 Employee . . . . . . . . . . . . . . . . 3
2.12 ESOP . . . . . . . . . . . . . . . . . . 3
2.13 Non-Pension Benefit. . . . . . . . . . . 3
2.14 Participant. . . . . . . . . . . . . . . 3
-i-
<PAGE>
2.15 Pension Benefit. . . . . . . . . . . . . 3
2.16 Pension Plan . . . . . . . . . . . . . . 3
2.17 Plan . . . . . . . . . . . . . . . . . . 3
2.18 Plan Year. . . . . . . . . . . . . . . . 3
2.19 Savings Plan. . . . . . . . . . . . . . 3
ARTICLE III - ADMINISTRATION OF PLAN . . . . . . . . . 4
3.1 Administrator. . . . . . . . . . . . . . 4
3.2 Powers . . . . . . . . . . . . . . . . . 4
3.3 Duties of the Administrative
Committee. . . . . . . . . . . . . . . 5
3.4 Indemnification. . . . . . . . . . . . . 6
ARTICLE IV - ELIGIBILITY . . . . . . . . . . . . . . . 7
4.1 Eligibility Requirements . . . . . . . . 7
4.2 Determination of Eligibility . . . . . . 7
ARTICLE V - BENEFITS . . . . . . . . . . . . . . . . . 8
5.1 Pension Benefit. . . . . . . . . . . . . 8
5.2 Non-Pension Benefit. . . . . . . . . . . 10
5.3 Distribution of Benefits . . . . . . . . 13
5.4 Funding of Benefits. . . . . . . . . . . 16
5.5 Withholding. . . . . . . . . . . . . . . 16
-ii-
<PAGE>
ARTICLE VI - MISCELLANEOUS . . . . . . . . . . . . . . 17
6.1 Assignment . . . . . . . . . . . . . . . 17
6.2 Amendment and Termination. . . . . . . . 17
6.3 No Guarantee of Employment . . . . . . . 17
6.4 Construction . . . . . . . . . . . . . . 18
-iii-
<PAGE>
SUPPLEMENTAL BENEFIT PLAN
FOR
ALABAMA POWER COMPANY
ARTICLE I - PURPOSE AND ADOPTION OF PLAN
1.1 Adoption: Alabama Power Company hereby adopts and establishes the
Supplemental Benefit Plan for Alabama Power Company. The Plan shall be an
unfunded deferred compensation arrangement whose benefits shall be paid solely
from the general assets of the Company.
1.2 Purpose: The Plan is designed to provide certain retirement and
other deferred compensation benefits primarily for a select group of management
or highly compensated employees which are not otherwise payable or cannot
otherwise be provided by the Company (1) under the Pension Plan for Employees of
Alabama Power Company, The Southern Company Employee Savings Plan, and The
Southern Company Employee Stock Ownership Plan, as a result of the limitations
set forth under Sections 401(a)(17), 401(k), 401(m), 402(g), or 415 of the
Internal Revenue Code of 1986, as amended from time to time and (2) to
compensate for lost benefits resulting from participation in The Southern
Company Deferred Compensation Plan, as amended from time to time.
ARTICLE II DEFINITIONS
2.1 "Account" shall mean the account or accounts established and
maintained by the Company to reflect the interest of a Participant in the Plan
resulting from a Participant's Non-Pension Benefit calculated in accordance with
Section 5.2.
<PAGE>
2.2 "Administrative Committee" shall mean the Retirement
Board of the Pension Plan.
2.3 "Affiliated Employer" shall mean any corporation which is a member
of the controlled group of corporations of which The Southern Company is the
common parent corporation.
2.4 "Beneficiary" shall mean any person, estate, trust, or organization
entitled to receive any payment under the Plan upon the death of a Participant.
2.5 "Board of Directors" shall mean the Board of Directors
of the Company.
2.6 "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
2.7 "Common Stock" shall mean common stock of The Southern
Company.
2.8 "Company" shall mean Alabama Power Company.
2.9 "Deferred Compensation Plan" shall mean The Southern
Company Deferred Compensation Plan, as amended from time to time, following its
adoption by the Board of Directors.
2.10 "Effective Date" shall mean January 1, 1983. The Effective Date of
this amendment and restatement shall mean January 1, 1996.
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<PAGE>
2.11 "Employee" shall mean any person who is currently
employed by the Company.
2.12 "ESOP" shall mean The Southern Company Employee Stock Ownership
Plan, as amended from time to time.
2.13 "Non-Pension Benefit" shall mean the benefit described
in Section 5.2.
2.14 "Participant" shall mean an Employee or former Employee of the
Company who is eligible pursuant to Sections 4.1 and 4.2.
2.15 "Pension Benefit" shall mean the benefit described in
Section 5.1.
2.16 "Pension Plan" shall mean the defined benefit pension plan
maintained by the Company or an Affiliated Employer, as amended from time to
time.
2.17 "Plan" shall mean the Supplemental Benefit Plan for Alabama Power
Company, as amended from time to time.
2.18 "Plan Year" shall mean the calendar year.
2.19 "Savings Plan" shall mean The Southern Company Employee Savings
Plan, as amended from time to time.
Where the context requires, the definitions of all terms set forth in
the Pension Plan, the ESOP, the Savings Plan and the Deferred Compensation Plan
shall apply with equal force and effect for purposes of interpretation and
administration of the Plan,
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<PAGE>
unless said terms are otherwise specifically defined in the Plan. The masculine
pronoun shall be construed to include the feminine pronoun and the singular
shall include the plural, where the context so requires.
ARTICLE III ADMINISTRATION OF PLAN
3.1 Administrator. The general administration of the Plan
shall be placed in the Administrative Committee.
3.2 Powers. The Administrative Committee shall administer the Plan in
accordance with its terms and shall have all powers necessary to carry out the
provisions of the Plan more particularly set forth herein. It shall interpret
the Plan and shall determine all questions arising in the administration,
interpretation and application of the Plan. Any such determination by it shall
be conclusive and binding on all persons. It may adopt such regulations as it
deems desirable for the conduct of its affairs. It may appoint such accountants,
counsel, actuaries, specialists and other persons as it deems necessary or
desirable in connection with the administration of this Plan, and shall be the
agent for the service of process.
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<PAGE>
3.3 Duties of the Administrative Committee.
(a) The Administrative Committee is responsible for the
daily administration of the Plan. It may appoint other persons or entities to
perform any of its fiduciary functions. The Administrative Committee and any
such appointee may employ advisors and other persons necessary or convenient to
help it carry out its duties, including its fiduciary duties. The Administrative
Committee shall have the right to remove any such appointee from his position.
Any person, group of persons or entity may serve in more than one fiduciary
capacity.
(b) The Administrative Committee shall maintain accurate and
detailed records and accounts of Participants and of their rights under the Plan
and of all receipts, disbursements, transfers and other transactions concerning
the Plan. Such accounts, books and records relating thereto shall be open at all
reasonable times to inspection and audit by persons designated by the
Administrative Committee.
(c) The Administrative Committee shall take all steps
necessary to ensure that the Plan complies with the law at all times. These
steps shall include such items as the preparation and filing of all documents
and forms required by any governmental agency; maintaining of adequate
Participants' records; recording
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<PAGE>
and transmission of all notices required to be given to Participants and their
Beneficiaries; the receipt and dissemination, if required, of all reports and
information received from an Affiliated Employer; securing of such fidelity
bonds as may be required by law; and doing such other acts necessary for the
proper administration of the Plan. The Administrative Committee shall keep a
record of all of its proceedings and acts, and shall keep all such books of
account, records and other data as may be necessary for proper administration of
the Plan.
3.4 Indemnification. The Company shall indemnify the Administrative
Committee against any and all claims, losses, damages, expenses and liability
arising from an action or failure to act, except when the same is finally
judicially determined to be due to gross negligence or willful misconduct. The
Company may purchase at its own expense sufficient liability insurance for the
Administrative Committee to cover any and all claims, losses, damages and
expenses arising from any action or failure to act in connection with the
execution of the duties as Administrative Committee. No member of the
Administrative Committee who is also an Employee of the Company shall receive
any compensation from the Plan for his service as such.
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<PAGE>
ARTICLE IV ELIGIBILITY
4.1 Eligibility Requirements. All Employees (a) who are determined
eligible to participate in accordance with Section 4.2, (b) whose benefits under
the Pension Plan of the Company are limited by the limitations set forth in
Sections 401(a)(17) or 415 of the Code, (c) for whom contributions by the
Company to the Savings Plan are limited by the limitations set forth in Sections
401(a)(17), 401(k), 401(m), 402(g) or 415 of the Code, (d) for whom
contributions by the Company to the ESOP are limited by the limitations set
forth in Sections 401(a)(17) or 415 of the Code or (e) who after December 31,
1995, make deferrals under the Deferred Compensation Plan, shall be eligible to
receive benefits under the Plan.
4.2 Determination of Eligibility. The Administrative Committee shall
determine which Employees are eligible to participate. Upon becoming a
Participant, an Employee shall be deemed to have assented to the Plan and to any
amendments hereafter adopted. The Administrative Committee shall be authorized
to rescind the eligibility of any Participant if necessary to insure that the
Plan is maintained primarily for the purpose of providing deferred compensation
to a select group of management or highly
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<PAGE>
compensated employees under the Employee Retirement Income Security Act of 1974,
as amended.
ARTICLE V BENEFITS
5.1 Pension Benefit.
(a) If a Participant has Accredited Service with respect to
the Pension Plan of the Company, but not with respect to the Pension Plan of any
Affiliated Employer, he shall be entitled to a Pension Benefit equal to that
portion of his Retirement Income under the Pension Plan of the Company which is
not payable under such Pension Plan as a result of the limitations imposed by
Sections 401(a)(17), 415(b), or 415(e) of the Code.
(b) If a Participant has Accredited Service with respect to
the Pension Plan of the Company and with respect to the Pension Plan of one or
more Affiliated Employers, his Pension Benefit payable by the Company, and any
Affiliated Employer(s) shall be equal to that portion of his combined Retirement
Income under each Pension Plan which is not payable under any of such Pension
Plans as a result of the limitations described by Sections 401(a)(17), 415(b),
or 415(e) of the Code, multiplied by a fraction, the sum of the individual
fractions not to exceed one (1), the numerator of which is his years of
Accredited Service
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<PAGE>
under the Pension Plan of the Company or any Affiliated Employer(s) and the
denominator which is his total years of Accredited Service under the Pension
Plans of the Company and any Affiliated Employer(s).
(c) For purposes of this Section 5.1, the Pension Benefit of
a Participant shall be calculated based on the Participant's Earnings that are
considered under the Pension Plan of the Company in calculating his Retirement
Income, without regard to the limitation of Section 401(a)(17) of the Code,
including any portion of his compensation he may have elected to defer under the
Deferred Compensation Plan but excluding Incentive Pay he deferred under such
Deferred Compensation Plan.
(d) To the extent that a Participant's Retirement Income
under a Pension Plan is recalculated as a result of an amendment to such Pension
Plan in order to increase the amount of his Retirement Income, the Participant's
Pension Benefit shall also be recalculated in order to properly reflect such
increase in determining payments of the Participant's Pension Benefit made on or
after the effective date of such increase.
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<PAGE>
5.2 Non-Pension Benefit.
(a) A Participant shall be entitled to a Non-Pension Benefit
which is determined under this Section 5.2. An Account shall be established for
the Participant by the Company, as of his initial Plan Year of participation in
the Plan. Each Plan Year such Account shall be credited with an amount equal to
the amount that the Company is prohibited from contributing (1) to the Savings
Plan on behalf of the Participant as a result of the limitations imposed by
Sections 401(a)(17), 401(k), 401(m), 402(g), 415(c), or 415(e) of the Code and
(2) to the ESOP on behalf of the Participant as a result of the limitations
imposed by Sections 401(a)(17), 415(c), or 415(e) of the Code.
(b) For purposes of this Section 5.2, the Non-Pension
Benefit of a Participant shall be calculated based on the Participant's
compensation that would have been considered in calculating allocations to his
accounts under the Savings Plan and ESOP, without regard to the limitations of
Section 401(a)(17) or Section 402(g) of the Code, including any portion of his
compensation he may have elected to defer under the Deferred Compensation Plan
but excluding Incentive Pay he deferred under the Deferred Compensation Plan.
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<PAGE>
(c) All amounts so credited to the Account of the
Participant shall be deemed to be invested in the Common Stock at the same time
that such amounts would have been so invested if they had been contributed by
the Company to the Savings Plan or the ESOP, as the case may be. In addition,
such Account shall be credited with respect to shares of Common Stock allocated
to the Participant's Account as follows:
(1) In the case of cash dividends, such additional
shares as could be purchased with the dividends which would have been
payable if the credited shares had been outstanding;
(2) In the case of dividends payable in property
other than cash or Common Stock, such additional shares as could be
purchased with the fair market value of the property which would have
been payable if the credited shares had been outstanding; or
(3) In the case of dividends payable in Common
Stock, such additional shares as would have been payable on the
credited shares if they had been outstanding.
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<PAGE>
(d) As soon as practicable following the first day of his
eligibility to have benefits credited to his Account, a Participant shall
designate in writing on a form to be prescribed by the Company the method of
payment of his Account, which shall be the payment of a single lump sum or a
series of annual installments not to exceed twenty (20). The method of
distribution initially designated by a Participant shall not be revoked and
shall govern the distribution of each Account established for the benefit of the
Participant by the Company. Notwithstanding, in the sole discretion of the
Administrative Committee upon application by the Participant, the method of
distribution designated by such Participant may be modified not prior to 395
days nor later than 365 days prior to a Participant's date of separation from
service in order to change the form of distribution of his Account in accordance
with the terms of the Plan. Each Participant, his Beneficiary, and legal
representative shall be bound as to any action taken pursuant to the method of
distribution elected by a Participant and the terms of the Plan.
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<PAGE>
5.3 Distribution of Benefits.
(a) The Pension Benefit, as determined in accordance with
Section 5.1, shall be payable in monthly increments on the first day of the
month concurrently with and in the same manner as the Participant's Retirement
Income under the Pension Plan. The Beneficiary of a Participant's Pension
Benefit shall be the same as the beneficiary of the Participant's Retirement
Income under the Pension Plan.
(b) When a Participant terminates his employment with the
Company, said Participant shall be entitled to receive the market value of any
shares of Common Stock (and fractions thereof) reflected in any Account
maintained by the Company for his benefit under the Plan in a single lump sum
distribution or annual installments not to exceed twenty (20). Such distribution
shall be made not later than sixty (60) days following the close of the calendar
quarter in which his termination of employment occurs, or as soon as reasonably
practicable thereafter. The transfer by a Participant between companies within
The Southern Company shall not be deemed to be a termination of employment with
the Company. No portion of a Participant's Account shall be distributed in
Common Stock.
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<PAGE>
(c) In the event a Participant elects to receive the
distribution of his Account in annual installments, the first payment shall be
made not later than sixty (60) days following the close of the calendar quarter
in which his termination of employment occurs, or as soon as reasonably
practicable thereafter, and shall be an amount equal to the balance in the
Participant's Account divided by the number of annual installment payments. Each
subsequent annual payment shall be an amount equal to the balance in the
Participant's Account divided by the number of the remaining annual payments and
shall be due on the anniversary of the preceding payment date. No portion of a
Participant's Account shall be distributed in Common Stock.
(d) Upon the death of a Participant, or a former
Participant prior to the payment of all amounts credited to said
Participant's Account, the unpaid balance shall be paid in the sole
discretion of the Administrative Committee (1) in a lump sum to the
designated Beneficiary of a Participant or former Participant
within sixty (60) days following the close of the calendar quarter
in which the Administrative Committee is provided evidence of the
Participant's death (or as soon as reasonably practicable
thereafter) or (2) in accordance with the distribution method
chosen by such Participant or former Participant. The Beneficiary
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<PAGE>
designation may be changed by the Participant or former Participant at any time
without the consent of the prior Beneficiary. In the event a Beneficiary
designation is not on file or the designated Beneficiary is deceased or cannot
be located, payment will be made to the estate of the Participant or former
Participant. No portion of a Participant's Account shall be distributed in
Common Stock.
(e) Upon the total disability of a Participant or former
Participant, as determined by the Social Security Administration, the unpaid
balance of his Account shall be paid in the sole discretion of the
Administrative Committee (1) in a lump sum to the Participant or former
Participant, or his legal representative within sixty (60) days following the
notification of the Administrative Committee of the determination of disability
by the Social Security Administration (or as soon as reasonably practicable
thereafter) or (2) in accordance with the distribution method elected by such
Participant or former Participant. No portion of a Participant's Account shall
be distributed in Common Stock.
(f) The Administrative Committee in its sole discretion upon
application made by the Participant, a designated Beneficiary, or their legal
representative, may determine to accelerate payments or, in the event of death
or total disability (as determined by
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<PAGE>
Social Security Administration), to extend or otherwise make payments in a
manner different from the manner in which such payment would be made under the
method of distribution elected by the Participant in the absence of such
determination.
5.4 Funding of Benefits. The Company maintaining an Account for the
benefit of a Participant shall not reserve or otherwise set aside funds for the
payment of its obligations under the Plan, and such obligations shall be paid
solely from the general assets of the Company. Notwithstanding that a
Participant shall be entitled to receive the balance of his Account under the
Plan, the assets from which such amount shall be paid at all times remain
subject to the claims of the creditors of the Company.
5.5 Withholding. There shall be deducted from the payment of any
Pension Benefit or Non-Pension Benefit due under the Plan the amount of any tax
required by any governmental authority to be withheld and paid over by the
Company to such governmental authority for the account of the Participant or
Beneficiary entitled to such payment.
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<PAGE>
ARTICLE VI MISCELLANEOUS
6.1 Assignment. Neither the Participant, his Beneficiary, nor his legal
representative shall have any rights to sell, assign, transfer or otherwise
convey the right to receive the payment of any Pension Benefit or Non-Pension
Benefit due hereunder, which payment and the right thereto are expressly
declared to be nonassignable and nontransferable. Any attempt to assign or
transfer the right to payment under the Plan shall be null and void and of no
effect.
6.2 Amendment and Termination. The Plan may be amended or terminated at
any time by the Board of Directors, provided that no amendment or termination
shall cause a forfeiture or reduction in any benefits accrued as of the date of
such amendment or termination.
6.3 No Guarantee of Employment. Participation hereunder shall not be
construed as creating any contract of employment between the Company and a
Participant, nor shall it limit the right of the Company to suspend, terminate,
alter, or modify, whether or not for cause, the employment relationship between
the Company and a Participant.
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<PAGE>
6.4 Construction. This Plan shall be construed in accordance with and
governed by the laws of the State of Alabama, to the extent such laws are not
otherwise superseded by the laws of the United States.
IN WITNESS WHEREOF, the Plan has been executed by duly authorized
officers of Alabama Power Company, pursuant to resolutions of the Board of
Directors of Alabama Power Company, this day of , 1996.
ALABAMA POWER COMPANY
(CORPORATE SEAL)
By:
Attest:
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<PAGE>
Exhibit 10(a)72
SUPPLEMENTAL BENEFIT PLAN
FOR
GEORGIA POWER COMPANY
January 1, 1996
<PAGE>
SUPPLEMENTAL BENEFIT PLAN
FOR
GEORGIA POWER COMPANY
Page
ARTICLE I - PURPOSE AND ADOPTION OF PLAN . . . . . . . . . . . . . 1
1.1 Adoption . . . . . . . . . . . . . . . . 1
1.2 Purpose. . . . . . . . . . . . . . . . . 1
ARTICLE II - DEFINITIONS . . . . . . . . . . . . . . . . . . . . . 1
2.1 Account. . . . . . . . . . . . . . . . . 1
2.2 Affiliated Employer. . . . . . . . . . . 2
2.3 Beneficiary. . . . . . . . . . . . . . . 2
2.4 Board of Directors . . . . . . . . . . . 2
2.5 Code . . . . . . . . . . . . . . . . . . 2
2.6 Common Stock . . . . . . . . . . . . . . 2
2.7 Company. . . . . . . . . . . . . . . . . 2
2.8 Deferred Compensation Plan . . . . . . . 2
2.9 Effective Date . . . . . . . . . . . . . 2
2.10 Employee . . . . . . . . . . . . . . . . 2
2.11 ESOP . . . . . . . . . . . . . . . . . . 3
2.12 Non-Pension Benefit. . . . . . . . . . . 3
2.13 Participant. . . . . . . . . . . . . . . 3
2.14 Pension Benefit. . . . . . . . . . . . . 3
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<PAGE>
2.15 Pension Plan . . . . . . . . . . . . . . 3
2.16 Plan . . . . . . . . . . . . . . . . . . 3
2.17 Plan Year. . . . . . . . . . . . . . . . 3
2.18 Savings Plan. . . . . . . . . . . . . . 3
ARTICLE III - ADMINISTRATION OF PLAN . . . . . . . . . . . . . . . 4
3.1 Administrator. . . . . . . . . . . . . . 4
3.2 Powers . . . . . . . . . . . . . . . . . 4
3.3 Duties of the Board of
Directors. . . . . . . . . . . . . . . 4
3.4 Indemnification. . . . . . . . . . . . . 6
ARTICLE IV - ELIGIBILITY . . . . . . . . . . . . . . . . . . . . . 6
4.1 Eligibility Requirements . . . . . . . . 6
4.2 Determination of Eligibility . . . . . . 7
ARTICLE V - BENEFITS . . . . . . . . . . . . . . . . . . . . . . . 8
5.1 Pension Benefit. . . . . . . . . . . . . 8
5.2 Non-Pension Benefit. . . . . . . . . . . 9
5.3 Distribution of Benefits . . . . . . . . 12
5.4 Funding of Benefits. . . . . . . . . . . 15
5.5 Withholding. . . . . . . . . . . . . . . 15
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<PAGE>
ARTICLE VI - MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . 16
6.1 Assignment . . . . . . . . . . . . . . . 16
6.2 Amendment and Termination. . . . . . . . 16
6.3 No Guarantee of Employment . . . . . . . 16
6.4 Construction . . . . . . . . . . . . . . 17
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<PAGE>
SUPPLEMENTAL BENEFIT PLAN
FOR
GEORGIA POWER COMPANY
ARTICLE I - PURPOSE AND ADOPTION OF PLAN
1.1 Adoption: Georgia Power Company hereby adopts and establishes the
Supplemental Benefit Plan for Georgia Power Company. The Plan shall be an
unfunded deferred compensation arrangement whose benefits shall be paid solely
from the general assets of the Company.
1.2 Purpose: The Plan is designed to provide certain retirement and
other deferred compensation benefits primarily for a select group of management
or highly compensated employees which are not otherwise payable or cannot
otherwise be provided by the Company (1) under the Pension Plan for Employees of
Georgia Power Company, The Southern Company Employee Savings Plan, and The
Southern Company Employee Stock Ownership Plan, as a result of the limitations
set forth under Sections 401(a)(17), 401(k), 401(m), 402(g), or 415 of the
Internal Revenue Code of 1986, as amended from time to time and (2) to
compensate for lost benefits resulting from participation in The Southern
Company Deferred Compensation Plan, as amended from time to time.
ARTICLE II DEFINITIONS
2.1 "Account" shall mean the account or accounts established and
maintained by the Company to reflect the interest of a Participant in the Plan
resulting from a Participant's Non-Pension Benefit calculated in accordance with
Section 5.2.
<PAGE>
2.2 "Affiliated Employer" shall mean any corporation which is a member
of the controlled group of corporations of which The Southern Company is the
common parent corporation.
2.3 "Beneficiary" shall mean any person, estate, trust, or organization
entitled to receive any payment under the Plan upon the death of a Participant.
2.4 "Board of Directors" shall mean the Board of Directors
of the Company.
2.5 "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
2.6 "Common Stock" shall mean common stock of The Southern
Company.
2.7 "Company" shall mean Georgia Power Company.
2.8 "Deferred Compensation Plan" shall mean The Southern
Company Deferred Compensation Plan, as amended from time to time, following its
adoption by the Board of Directors.
2.9 "Effective Date" shall mean January 1, 1983. The Effective Date of
this amendment and restatement shall mean January 1, 1996.
2.10 "Employee" shall mean any person who is currently
employed by the Company.
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<PAGE>
2.11 "ESOP" shall mean The Southern Company Employee Stock Ownership
Plan, as amended from time to time.
2.12 "Non-Pension Benefit" shall mean the benefit described
in Section 5.2.
2.13 "Participant" shall mean an Employee or former Employee of the
Company who is eligible pursuant to Sections 4.1 and 4.2.
2.14 "Pension Benefit" shall mean the benefit described in
Section 5.1.
2.15 "Pension Plan" shall mean the defined benefit pension plan
maintained by the Company or an Affiliated Employer, as amended from time to
time.
2.16 "Plan" shall mean the Supplemental Benefit Plan for Georgia Power
Company, as amended from time to time.
2.17 "Plan Year" shall mean the calendar year.
2.18 "Savings Plan" shall mean The Southern Company Employee Savings
Plan, as amended from time to time.
Where the context requires, the definitions of all terms set forth in
the Pension Plan, the ESOP, the Savings Plan and the Deferred Compensation Plan
shall apply with equal force and effect for purposes of interpretation and
administration of the Plan, unless said terms are otherwise specifically defined
in the Plan. The masculine pronoun shall be construed to include the feminine
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<PAGE>
pronoun and the singular shall include the plural, where the
context so requires.
ARTICLE III ADMINISTRATION OF PLAN
3.1 Administrator. The general administration of the Plan
shall be placed in the Board of Directors.
3.2 Powers. The Board of Directors shall administer the Plan in
accordance with its terms and shall have all powers necessary to carry out the
provisions of the Plan more particularly set forth herein. It shall interpret
the Plan and shall determine all questions arising in the administration,
interpretation and application of the Plan. Any such determination by it shall
be conclusive and binding on all persons. It may adopt such regulations as it
deems desirable for the conduct of its affairs. It may appoint such accountants,
counsel, actuaries, specialists and other persons as it deems necessary or
desirable in connection with the administration of this Plan, and shall be the
agent for the service of process.
3.3 Duties of the Board of Directors.
(a) The Board of Directors is responsible for the daily
administration of the Plan. It may appoint other persons or
entities to perform any of its fiduciary functions. The Board of
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<PAGE>
Directors and any such appointee may employ advisors and other persons necessary
or convenient to help it carry out its duties, including its fiduciary duties.
The Board of Directors shall have the right to remove any such appointee from
his position. Any person, group of persons or entity may serve in more than one
fiduciary capacity.
(b) The Board of Directors shall maintain accurate and
detailed records and accounts of Participants and of their rights under the Plan
and of all receipts, disbursements, transfers and other transactions concerning
the Plan. Such accounts, books and records relating thereto shall be open at all
reasonable times to inspection and audit by persons designated by the Board of
Directors.
(c) The Board of Directors shall take all steps necessary to
ensure that the Plan complies with the law at all times. These steps shall
include such items as the preparation and filing of all documents and forms
required by any governmental agency; maintaining of adequate Participants'
records; recording and transmission of all notices required to be given to
Participants and their Beneficiaries; the receipt and dissemination, if
required, of all reports and information received from an Affiliated Employer;
securing of such fidelity bonds as may
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<PAGE>
be required by law; and doing such other acts necessary for the proper
administration of the Plan. The Board of Directors shall keep a record of all of
its proceedings and acts, and shall keep all such books of account, records and
other data as may be necessary for proper administration of the Plan.
3.4 Indemnification. The Company shall indemnify the Board of Directors
against any and all claims, losses, damages, expenses and liability arising from
an action or failure to act, except when the same is finally judicially
determined to be due to gross negligence or willful misconduct. The Company may
purchase at its own expense sufficient liability insurance for the Board of
Directors to cover any and all claims, losses, damages and expenses arising from
any action or failure to act in connection with the execution of the duties as
Board of Directors. No member of the Board of Directors who is also an Employee
of the Company shall receive any compensation from the Plan for his services in
administering the Plan.
ARTICLE IV ELIGIBILITY
4.1 Eligibility Requirements. All Employees (a) who are
determined eligible to participate in accordance with Section 4.2;
(b) whose benefits under the Pension Plan of the Company are
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<PAGE>
limited by the limitations set forth in Sections 401(a)(17) or 415 of the Code,
(c) for whom contributions by the Company to the Savings Plan are limited by the
limitations set forth in Sections 401(a)(17), 401(k), 401(m), 402(g) or 415 of
the Code, (d) for whom contributions by the Company to the ESOP are limited by
the limitations set forth in Sections 401(a)(17) or 415 of the Code or (e) who
after December 31, 1995, make deferrals under the Deferred Compensation Plan,
shall be eligible to receive benefits under the Plan.
4.2 Determination of Eligibility. The Board of Directors shall
determine which Employees are eligible to participate. Upon becoming a
Participant, an Employee shall be deemed to have assented to the Plan and to any
amendments hereafter adopted. The Board of Directors shall be authorized to
rescind the eligibility of any Participant if necessary to insure that the Plan
is maintained primarily for the purpose of providing deferred compensation to a
select group of management or highly compensated employees under the Employee
Retirement Income Security Act of 1974, as amended.
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<PAGE>
ARTICLE V BENEFITS
5.1 Pension Benefit.
(a) If a Participant has Accredited Service with respect to
the Pension Plan of the Company, but not with respect to the Pension Plan of any
Affiliated Employer, he shall be entitled to a Pension Benefit equal to that
portion of his Retirement Income under the Pension Plan of the Company which is
not payable under such Pension Plan as a result of the limitations imposed by
Sections 401(a)(17), 415(b), or 415(e) of the Code.
(b) If a Participant has Accredited Service with respect to
the Pension Plan of the Company and with respect to the Pension Plan of one or
more Affiliated Employers, his Pension Benefit payable by the Company, and any
Affiliated Employer(s) shall be equal to that portion of his combined Retirement
Income under each Pension Plan which is not payable under any of such Pension
Plans as a result of the limitations described by Sections 401(a)(17), 415(b),
or 415(e) of the Code, multiplied by a fraction, the sum of the individual
fractions not to exceed one (1), the numerator of which is his years of
Accredited Service under the Pension Plan of the Company or any Affiliated
Employer(s) and the denominator which is his total years of Accredited Service
-8-
<PAGE>
under the Pension Plans of the Company and any Affiliated
Employer(s).
(c) For purposes of this Section 5.1, the Pension Benefit of
a Participant shall be calculated based on the Participant's Earnings that are
considered under the Pension Plan of the Company in calculating his Retirement
Income, without regard to the limitation of Section 401(a)(17) of the Code,
including any portion of his compensation he may have elected to defer under the
Deferred Compensation Plan but excluding Incentive Pay he deferred under such
Deferred Compensation Plan.
(d) To the extent that a Participant's Retirement Income
under a Pension Plan is recalculated as a result of an amendment to such Pension
Plan in order to increase the amount of his Retirement Income, the Participant's
Pension Benefit shall also be recalculated in order to properly reflect such
increase in determining payments of the Participant's Pension Benefit made on or
after the effective date of such increase.
5.2 Non-Pension Benefit.
(a) A Participant shall be entitled to a Non-Pension
Benefit which is determined under this Section 5.2. An Account
shall be established for the Participant by the Company, as of his
initial Plan Year of participation in the Plan. Each Plan Year
-9-
<PAGE>
such Account shall be credited with an amount equal to the amount that the
Company is prohibited from contributing (1) to the Savings Plan on behalf of the
Participant as a result of the limitations imposed by Sections 401(a)(17),
401(k), 401(m), 402(g), 415(c), or 415(e) of the Code and (2) to the ESOP on
behalf of the Participant as a result of the limitations imposed by Sections
401(a)(17), 415(c), or 415(e) of the Code.
(b) For purposes of this Section 5.2, the Non-Pension
Benefit of a Participant shall be calculated based on the Participant's
compensation that would have been considered in calculating allocations to his
accounts under the Savings Plan and ESOP, without regard to the limitations of
Section 401(a)(17) or Section 402(g) of the Code, including any portion of his
compensation he may have elected to defer under the Deferred Compensation Plan
but excluding Incentive Pay he deferred under the Deferred Compensation Plan.
(c) All amounts so credited to the Account of the
Participant shall be deemed to be invested in the Common Stock at the same time
that such amounts would have been so invested if they had been contributed by
the Company to the Savings Plan or the ESOP, as the case may be. In addition,
such Account shall be
-10-
<PAGE>
credited with respect to shares of Common Stock allocated to the Participant's
Account as follows:
(1) In the case of cash dividends, such additional
shares as could be purchased with the dividends which would have been
payable if the credited shares had been outstanding;
(2) In the case of dividends payable in property
other than cash or Common Stock, such additional shares as could be
purchased with the fair market value of the property which would have
been payable if the credited shares had been outstanding; or
(3) In the case of dividends payable in Common
Stock, such additional shares as would have been payable on the
credited shares if they had been outstanding.
(d) As soon as practicable following the first day of his
eligibility to have benefits credited to his Account, a Participant shall
designate in writing on a form to be prescribed by the Company the method of
payment of his Account, which shall be the payment of a single lump sum or a
series of annual installments not to exceed twenty (20). The method of
distribution initially designated by a Participant shall not be revoked and
shall govern the distribution of each Account established for the benefit of the
Participant by the Company. Notwithstanding, in the sole
-11-
<PAGE>
discretion of the Board of Directors upon application by the Participant, the
method of distribution designated by such Participant may be modified not prior
to 395 days nor later than 365 days prior to a Participant's date of separation
from service in order to change the form of distribution of his Account in
accordance with the terms of the Plan. Each Participant, his Beneficiary, and
legal representative shall be bound as to any action taken pursuant to the
method of distribution elected by a Participant and the terms of the Plan.
5.3 Distribution of Benefits.
(a) The Pension Benefit, as determined in accordance with
Section 5.1, shall be payable in monthly increments on the first day of the
month concurrently with and in the same manner as the Participant's Retirement
Income under the Pension Plan. The Beneficiary of a Participant's Pension
Benefit shall be the same as the beneficiary of the Participant's Retirement
Income under the Pension Plan.
(b) When a Participant terminates his employment with the
Company, said Participant shall be entitled to receive the market value of any
shares of Common Stock (and fractions thereof) reflected in any Account
maintained by the Company for his benefit under the Plan in a single lump sum
distribution or annual
-12-
<PAGE>
installments not to exceed twenty (20). Such distribution shall be made not
later than sixty (60) days following the close of the calendar quarter in which
his termination of employment occurs, or as soon as reasonably practicable
thereafter. The transfer by a Participant between companies within The Southern
Company shall not be deemed to be a termination of employment with the Company.
No portion of a Participant's Account shall be distributed in Common Stock.
(c) In the event a Participant elects to receive the
distribution of his Account in annual installments, the first payment shall be
made not later than sixty (60) days following the close of the calendar quarter
in which his termination of employment occurs, or as soon as reasonably
practicable thereafter, and shall be an amount equal to the balance in the
Participant's Account divided by the number of annual installment payments. Each
subsequent annual payment shall be an amount equal to the balance in the
Participant's Account divided by the number of the remaining annual payments and
shall be due on the anniversary of the preceding payment date. No portion of a
Participant's Account shall be distributed in Common Stock.
(d) Upon the death of a Participant, or a former
Participant prior to the payment of all amounts credited to said
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<PAGE>
Participant's Account, the unpaid balance shall be paid in the sole discretion
of the Board of Directors (1) in a lump sum to the designated Beneficiary of a
Participant or former Participant within sixty (60) days following the close of
the calendar quarter in which the Board of Directors is provided evidence of the
Participant's death (or as soon as reasonably practicable thereafter) or (2) in
accordance with the distribution method chosen by such Participant or former
Participant. The Beneficiary designation may be changed by the Participant or
former Participant at any time without the consent of the prior Beneficiary. In
the event a Beneficiary designation is not on file or the designated Beneficiary
is deceased or cannot be located, payment will be made to the estate of the
Participant or former Participant. No portion of a Participant's Account shall
be distributed in Common Stock.
(e) Upon the total disability of a Participant or former
Participant, as determined by the Social Security Administration, the unpaid
balance of his Account shall be paid in the sole discretion of the Board of
Directors (1) in a lump sum to the Participant or former Participant, or his
legal representative within sixty (60) days following the notification of the
Board of Directors of the determination of disability by the Social Security
Administration (or as soon as reasonably practicable thereafter) or
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<PAGE>
(2) in accordance with the distribution method elected by such Participant or
former Participant. No portion of a Participant's Account shall be distributed
in Common Stock.
(f) The Board of Directors in its sole discretion upon
application made by the Participant, a designated Beneficiary, or their legal
representative, may determine to accelerate payments or, in the event of death
or total disability (as determined by Social Security Administration), to extend
or otherwise make payments in a manner different from the manner in which such
payment would be made under the method of distribution elected by the
Participant in the absence of such determination.
5.4 Funding of Benefits. The Company maintaining an Account for the
benefit of a Participant shall not reserve or otherwise set aside funds for the
payment of its obligations under the Plan, and such obligations shall be paid
solely from the general assets of the Company. Notwithstanding that a
Participant shall be entitled to receive the balance of his Account under the
Plan, the assets from which such amount shall be paid at all times remain
subject to the claims of the creditors of the Company.
5.5 Withholding. There shall be deducted from the payment
of any Pension Benefit or Non-Pension Benefit due under the Plan
the amount of any tax required by any governmental authority to be
-15-
<PAGE>
withheld and paid over by the Company to such governmental authority for the
account of the Participant or Beneficiary entitled to such payment.
ARTICLE VI MISCELLANEOUS
6.1 Assignment. Neither the Participant, his Beneficiary, nor his legal
representative shall have any rights to sell, assign, transfer or otherwise
convey the right to receive the payment of any Pension Benefit or Non-Pension
Benefit due hereunder, which payment and the right thereto are expressly
declared to be nonassignable and nontransferable. Any attempt to assign or
transfer the right to payment under the Plan shall be null and void and of no
effect.
6.2 Amendment and Termination. The Plan may be amended or terminated at
any time by the Board of Directors, provided that no amendment or termination
shall cause a forfeiture or reduction in any benefits accrued as of the date of
such amendment or termination.
6.3 No Guarantee of Employment. Participation hereunder
shall not be construed as creating any contract of employment
between the Company and a Participant, nor shall it limit the right
of the Company to suspend, terminate, alter, or modify, whether or
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<PAGE>
not for cause, the employment relationship between the Company and
a Participant.
6.4 Construction. This Plan shall be construed in accordance with and
governed by the laws of the State of Georgia, to the extent such laws are not
otherwise superseded by the laws of the United States.
IN WITNESS WHEREOF, the Plan has been executed by duly authorized
officers of Georgia Power Company, pursuant to resolutions of the Board of
Directors of Georgia Power Company, this day of , 1996.
GEORGIA POWER COMPANY
(CORPORATE SEAL)
By:
Attest:
-17-
Exhibit 10(a)73
SUPPLEMENTAL BENEFIT PLAN
FOR
SOUTHERN COMPANY SERVICES, INC.
AND
SOUTHERN ELECTRIC INTERNATIONAL, INC.
January 1, 1996
<PAGE>
SUPPLEMENTAL BENEFIT PLAN
FOR
SOUTHERN COMPANY SERVICES, INC.
AND
SOUTHERN ELECTRIC INTERNATIONAL, INC.
Page
ARTICLE I - PURPOSE AND ADOPTION OF PLAN........................... 1
1.1 Adoption......................................... 1
1.2 Purpose.......................................... 1
ARTICLE II DEFINITIONS............................................. 2
2.1 "Account......................................... 2
2.2 "Affiliated Employer............................. 2
2.3 "Beneficiary..................................... 2
2.4 "Board of Directors.............................. 2
2.5 "Code............................................ 2
2.6 "Common Stock.................................... 2
2.7 "Company......................................... 2
2.8 "Deferred Compensation Plan...................... 2
2.9 "Effective Date.................................. 2
2.10 "Employee........................................ 3
2.11 "Employing Company............................... 3
2.12 "ESOP............................................ 3
2.13 "Non-Pension Benefit............................. 3
2.14 "Participant..................................... 3
2.15 "Pension Benefit................................. 3
2.16 "Pension Plan.................................... 3
i
<PAGE>
2.17 "Plan............................................ 3
2.18 "Plan Year....................................... 3
2.19 "Savings Plan.................................... 3
ARTICLE III ADMINISTRATION OF PLAN................................. 4
3.1 Administrator.................................... 4
3.2 Powers........................................... 4
3.3 Duties of the Board of Directors................. 5
3.4 Indemnification.................................. 6
ARTICLE IV ELIGIBILITY............................................. 6
4.1 Eligibility Requirements......................... 6
4.2 Determination of Eligibility..................... 7
ARTICLE V BENEFITS................................................. 7
5.1 Pension Benefit.................................. 7
5.2 Non-Pension Benefit.............................. 9
5.3 Distribution of Benefits......................... 11
5.4 Funding of Benefits.............................. 14
5.5 Withholding...................................... 14
ARTICLE VI MISCELLANEOUS........................................... 15
6.1 Assignment....................................... 15
6.2 Amendment and Termination........................ 15
6.3 No Guarantee of Employment....................... 15
6.4 Construction..................................... 15
ii
<PAGE>
SUPPLEMENTAL BENEFIT PLAN
FOR
SOUTHERN ELECTRIC SERVICES, INC.
AND
SOUTHERN ELECTRIC INTERNATIONAL, INC.
1
ARTICLE I - PURPOSE AND ADOPTION OF PLAN
1.1 Adoption: Southern Company Services, Inc. and Southern
Electric International, Inc. hereby adopt and establish the
Supplemental Benefit Plan for Southern Company Services, Inc. and
Southern Electric International, Inc. The Plan shall be an
unfunded deferred compensation arrangement whose benefits shall be
paid solely from the general assets of the Employing Companies.
1.2 Purpose: The Plan is designed to provide certain retirement and
other deferred compensation benefits primarily for a select group of management
or highly compensated employees which are not otherwise payable or cannot
otherwise be provided by the Employing Companies (1) under the Pension Plan for
Employees of Southern Company Services, Inc., The Southern Company Employee
Savings Plan, and The Southern Company Employee Stock Ownership Plan, as a
result of the limitations set forth under Sections 401(a)(17), 401(k), 401(m),
402(g), or 415 of the Internal Revenue Code of 1986, as amended from time to
time and (2) to compensate for lost benefits resulting from participation in The
Southern Company Deferred Compensation Plan, as amended from time to time.
1
<PAGE>
ARTICLE II DEFINITIONS
2
2.1 "Account" shall mean the account or accounts established and
maintained by an Employing Company to reflect the interest of a Participant in
the Plan resulting from a Participant's Non- Pension Benefit calculated in
accordance with Section 5.2.
2.2 "Affiliated Employer" shall mean any corporation which is a member
of the controlled group of corporations of which The Southern Company is the
common parent corporation.
2.3 "Beneficiary" shall mean any person, estate, trust, or organization
entitled to receive any payment under the Plan upon the death of a Participant.
2.4 "Board of Directors" shall mean the Board of Directors of
the Company.
2.5 "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
2.6 "Common Stock" shall mean common stock of The Southern
Company.
2.7 "Company" shall mean Southern Company Services, Inc.
2.8 "Deferred Compensation Plan" shall mean The Southern
Company Deferred Compensation Plan, as amended from time to time, following its
adoption by the Boards of Directors of Employing Companies.
2.9 "Effective Date" shall mean January 1, 1983. The Effective Date of
this amendment and restatement shall mean January 1, 1996.
2
<PAGE>
2.10 "Employee" shall mean any person who is currently
employed by an Employing Company.
2.11 "Employing Company" shall mean the Company, Southern Electric
International, Inc., and any affiliate or subsidiary of The Southern Company
which the Board of Directors may from time to time determine to bring under the
Plan and which shall adopt the Plan, and any successor of any of them.
2.12 "ESOP" shall mean The Southern Company Employee Stock Ownership
Plan, as amended from time to time.
2.13 "Non-Pension Benefit" shall mean the benefit described in
Section 5.2.
2.14 "Participant" shall mean an Employee or former Employee of an
Employing Company who is eligible pursuant to Sections 4.1 and 4.2.
2.15 "Pension Benefit" shall mean the benefit described in
Section 5.1.
2.16 "Pension Plan" shall mean the defined benefit pension plan
maintained by an Employing Company or Affiliated Employer, as amended from time
to time.
2.17 "Plan" shall mean the Supplemental Benefit Plan for
Southern Company Services, Inc. and Southern Electric
International, Inc., as amended from time to time.
2.18 "Plan Year" shall mean the calendar year.
2.19 "Savings Plan" shall mean The Southern Company Employee Savings
Plan, as amended from time to time.
3
<PAGE>
Where the context requires, the definitions of all terms set forth in
the Pension Plan, the ESOP, the Savings Plan and the Deferred Compensation Plan
shall apply with equal force and effect for purposes of interpretation and
administration of the Plan, unless said terms are otherwise specifically defined
in the Plan. The masculine pronoun shall be construed to include the feminine
pronoun and the singular shall include the plural, where the context so
requires.
ARTICLE III ADMINISTRATION OF PLAN
3
3.1 Administrator. The general administration of the Plan
shall be placed in the Board of Directors.
3.2 Powers. The Board of Directors shall administer the Plan in
accordance with its terms and shall have all powers necessary to carry out the
provisions of the Plan more particularly set forth herein. It shall interpret
the Plan and shall determine all questions arising in the administration,
interpretation and application of the Plan. Any such determination by it shall
be conclusive and binding on all persons. It may adopt such regulations as it
deems desirable for the conduct of its affairs. It may appoint such accountants,
counsel, actuaries, specialists and other persons as it deems necessary or
desirable in connection with the administration of this Plan, and shall be the
agent for the service of process.
4
<PAGE>
3.3 Duties of the Board of Directors.
(a) The Board of Directors is responsible for the daily
administration of the Plan. It may appoint other persons or entities to perform
any of its fiduciary functions. The Board of Directors and any such appointee
may employ advisors and other persons necessary or convenient to help it carry
out its duties, including its fiduciary duties. The Board of Directors shall
have the right to remove any such appointee from his position. Any person, group
of persons or entity may serve in more than one fiduciary capacity.
(b) The Board of Directors shall maintain accurate and
detailed records and accounts of Participants and of their rights under the Plan
and of all receipts, disbursements, transfers and other transactions concerning
the Plan. Such accounts, books and records relating thereto shall be open at all
reasonable times to inspection and audit by persons designated by the Board of
Directors.
(c) The Board of Directors shall take all steps necessary to
ensure that the Plan complies with the law at all times. These steps shall
include such items as the preparation and filing of all documents and forms
required by any governmental agency; maintaining of adequate Participants'
records; recording and transmission of all notices required to be given to
Participants and their Beneficiaries; the receipt and dissemination, if
required, of all reports and information received from an Affiliated Employer;
securing of such fidelity bonds as may
5
<PAGE>
be required by law; and doing such other acts necessary for the proper
administration of the Plan. The Board of Directors shall keep a record of all of
its proceedings and acts, and shall keep all such books of account, records and
other data as may be necessary for proper administration of the Plan.
3.4 Indemnification. The Employing Companies shall indemnify the Board
of Directors against any and all claims, losses, damages, expenses and liability
arising from an action or failure to act, except when the same is finally
judicially determined to be due to gross negligence or willful misconduct. The
Employing Companies may purchase at their own expense sufficient liability
insurance for the Board of Directors to cover any and all claims, losses,
damages and expenses arising from any action or failure to act in connection
with the execution of the duties as Board of Directors. No member of the Board
of Directors who is also an Employee of the Employing Companies shall receive
any compensation from the Plan for his services in administering the Plan.
ARTICLE IV ELIGIBILITY
4
4.1 Eligibility Requirements. All Employees (a) who are determined
eligible to participate in accordance with Section 4.2; (b) whose benefits under
the Pension Plan of their Employing Company are limited by the limitations set
forth in Sections 401(a)(17) or 415 of the Code, (c) for whom contributions by
their Employing Company to the Savings Plan are limited by the
6
<PAGE>
limitations set forth in Sections 401(a)(17), 401(k), 401(m), 402(g) or 415 of
the Code, (d) for whom contributions by their Employing Company to the ESOP are
limited by the limitations set forth in Sections 401(a)(17) or 415 of the Code
or (e) who after December 31, 1995, make deferrals under the Deferred
Compensation Plan, shall be eligible to receive benefits under the Plan.
4.2 Determination of Eligibility. The Board of Directors shall
determine which Employees are eligible to participate. Upon becoming a
Participant, an Employee shall be deemed to have assented to the Plan and to any
amendments hereafter adopted. The Board of Directors shall be authorized to
rescind the eligibility of any Participant if necessary to insure that the Plan
is maintained primarily for the purpose of providing deferred compensation to a
select group of management or highly compensated employees under the Employee
Retirement Income Security Act of 1974, as amended.
ARTICLE V BENEFITS
5
5.1 Pension Benefit.
(a) If a Participant has Accredited Service with respect to
the Pension Plan of his Employing Company, but not with respect to the Pension
Plan of any other Employing Company or Affiliated Employer, he shall be entitled
to a Pension Benefit equal to that portion of his Retirement Income under the
Pension Plan of his Employing Company which is not payable under such Pension
Plan as
7
<PAGE>
a result of the limitations imposed by Sections 401(a)(17), 415(b),
or 415(e) of the Code.
(b) If a Participant has Accredited Service with respect to
the Pension Plan of his Employing Company and with respect to the Pension Plan
of any other Employing Company or one or more Affiliated Employers, his Pension
Benefit payable by his Employing Company, his former Employing Company, and/or
Affiliated Employer(s) shall be equal to that portion of his combined Retirement
Income under each Pension Plan which is not payable under any of such Pension
Plans as a result of the limitations described by Sections 401(a)(17), 415(b),
or 415(e) of the Code, multiplied by a fraction, the sum of the individual
fractions not to exceed one (1), the numerator of which is his years of
Accredited Service under the Pension Plan of each Employing Company or
Affiliated Employer and the denominator which is his total years of Accredited
Service under the Pension Plans of all of his Employing Companies and Affiliated
Employers.
(c) For purposes of this Section 5.1, the Pension Benefit of a
Participant shall be calculated based on the Participant's Earnings that are
considered under the Pension Plan of his Employing Company in calculating his
Retirement Income, without regard to the limitation of Section 401(a)(17) of the
Code, including any portion of his compensation he may have elected to defer
under the Deferred Compensation Plan but excluding Incentive Pay he deferred
under such Deferred Compensation Plan.
8
<PAGE>
(d) To the extent that a Participant's Retirement Income under
a Pension Plan is recalculated as a result of an amendment to such Pension Plan
in order to increase the amount of his Retirement Income, the Participant's
Pension Benefit shall also be recalculated in order to properly reflect such
increase in determining payments of the Participant's Pension Benefit made on or
after the effective date of such increase.
5.2 Non-Pension Benefit.
(a) A Participant shall be entitled to a Non-Pension Benefit
which is determined under this Section 5.2. An Account shall be established for
the Participant by his Employing Company, as of his initial Plan Year of
participation in the Plan, and by each other Employing Company by which the
Participant is subsequently employed. Each Plan Year such Account shall be
credited with an amount equal to the amount that his Employing Company is
prohibited from contributing (1) to the Savings Plan on behalf of the
Participant as a result of the limitations imposed by Sections 401(a)(17),
401(k), 401(m), 402(g), 415(c), or 415(e) of the Code and (2) to the ESOP on
behalf of the Participant as a result of the limitations imposed by Sections
401(a)(17), 415(c), or 415(e) of the Code.
(b) For purposes of this Section 5.2, the Non-Pension Benefit
of a Participant shall be calculated based on the Participant's compensation
that would have been considered in calculating allocations to his accounts under
the Savings Plan and ESOP, without regard to the limitations of Section
401(a)(17) or
9
<PAGE>
Section 402(g) of the Code, including any portion of his compensation he may
have elected to defer under the Deferred Compensation Plan but excluding
Incentive Pay he deferred under the Deferred Compensation Plan.
(c) All amounts so credited to the Account of the Participant
shall be deemed to be invested in the Common Stock at the same time that such
amounts would have been so invested if they had been contributed by his
Employing Company to the Savings Plan or the ESOP, as the case may be. In
addition, such Account shall be credited with respect to shares of Common Stock
allocated to the Participant's Account as follows:
(1) In the case of cash dividends, such additional
shares as could be purchased with the dividends which would have been
payable if the credited shares had been outstanding;
(2) In the case of dividends payable in property
other than cash or Common Stock, such additional shares as could be
purchased with the fair market value of the property which would have
been payable if the credited shares had been outstanding; or
(3) In the case of dividends payable in Common Stock,
such additional shares as would have been payable on the credited
shares if they had been outstanding.
(d) As soon as practicable following the first day of his
eligibility to have benefits credited to his Account, a Participant shall
designate in writing on a form to be prescribed by the Company the method of
payment of his Account, which shall be
10
<PAGE>
the payment of a single lump sum or a series of annual installments not to
exceed twenty (20). The method of distribution initially designated by a
Participant shall not be revoked and shall govern the distribution of each
Account established for the benefit of the Participant by his Employing
Companies. Notwithstanding, in the sole discretion of the Board of Directors
upon application by the Participant, the method of distribution designated by
such Participant may be modified not prior to 395 days nor later than 365 days
prior to a Participant's date of separation from service in order to change the
form of distribution of his Account in accordance with the terms of the Plan.
Each Participant, his Beneficiary, and legal representative shall be bound as to
any action taken pursuant to the method of distribution elected by a Participant
and the terms of the Plan.
5.3 Distribution of Benefits.
(a) The Pension Benefit, as determined in accordance with
Section 5.1, shall be payable in monthly increments on the first day of the
month concurrently with and in the same manner as the Participant's Retirement
Income under the Pension Plan. The Beneficiary of a Participant's Pension
Benefit shall be the same as the beneficiary of the Participant's Retirement
Income under the Pension Plan.
(b) When a Participant terminates his employment with an
Employing Company, said Participant shall be entitled to receive the market
value of any shares of Common Stock (and fractions thereof) reflected in any
Account maintained by an Employing
11
<PAGE>
Company for his benefit under the Plan in a single lump sum distribution or
annual installments not to exceed twenty (20). Such distribution shall be made
not later than sixty (60) days following the close of the calendar quarter in
which his termination of employment occurs, or as soon as reasonably practicable
thereafter. The transfer by a Participant between companies within The Southern
Company shall not be deemed to be a termination of employment with an Employing
Company. No portion of a Participant's Account shall be distributed in Common
Stock.
(c) In the event a Participant elects to receive the
distribution of his Account in annual installments, the first payment shall be
made not later than sixty (60) days following the close of the calendar quarter
in which his termination of employment occurs, or as soon as reasonably
practicable thereafter, and shall be an amount equal to the balance in the
Participant's Account divided by the number of annual installment payments. Each
subsequent annual payment shall be an amount equal to the balance in the
Participant's Account divided by the number of the remaining annual payments and
shall be due on the anniversary of the preceding payment date. No portion of a
Participant's Account shall be distributed in Common Stock.
(d) Upon the death of a Participant, or a former Participant
prior to the payment of all amounts credited to said Participant's Account, the
unpaid balance shall be paid in the sole discretion of the Board of Directors
(1) in a lump sum to the designated Beneficiary of a Participant or former
Participant
12
<PAGE>
within sixty (60) days following the close of the calendar quarter in which the
Board of Directors is provided evidence of the Participant's death (or as soon
as reasonably practicable thereafter) or (2) in accordance with the distribution
method chosen by such Participant or former Participant. The Beneficiary
designation may be changed by the Participant or former Participant at any time
without the consent of the prior Beneficiary. In the event a Beneficiary
designation is not on file or the designated Beneficiary is deceased or cannot
be located, payment will be made to the estate of the Participant or former
Participant. No portion of a Participant's Account shall be distributed in
Common Stock.
(e) Upon the total disability of a Participant or former
Participant, as determined by the Social Security Administration, the unpaid
balance of his Account shall be paid in the sole discretion of the Board of
Directors (1) in a lump sum to the Participant or former Participant, or his
legal representative within sixty (60) days following the notification of the
Board of Directors of the determination of disability by the Social Security
Administration (or as soon as reasonably practicable thereafter) or (2) in
accordance with the distribution method elected by such Participant or former
Participant. No portion of a Participant's Account shall be distributed in
Common Stock.
(f) The Board of Directors in its sole discretion upon
application made by the Participant, a designated Beneficiary, or their legal
representative, may determine to accelerate payments or, in the event of death
or total disability (as determined by
13
<PAGE>
Social Security Administration), to extend or otherwise make payments in a
manner different from the manner in which such payment would be made under the
method of distribution elected by the Participant in the absence of such
determination.
5.4 Funding of Benefits. Any Employing Company maintaining an Account
for the benefit of a Participant shall not reserve or otherwise set aside funds
for the payment of its obligations under the Plan, and such obligations shall be
paid solely from the general assets of the Employing Companies. Notwithstanding
that a Participant shall be entitled to receive the balance of his Account under
the Plan, the assets from which such amount shall be paid at all times remain
subject to the claims of the creditors of the Participant's Employing Companies.
5.5 Withholding. There shall be deducted from the payment of any
Pension Benefit or Non-Pension Benefit due under the Plan the amount of any tax
required by any governmental authority to be withheld and paid over by an
Employing Company to such governmental authority for the account of the
Participant or Beneficiary entitled to such payment.
14
<PAGE>
ARTICLE VI MISCELLANEOUS
6
6.1 Assignment. Neither the Participant, his Beneficiary, nor his legal
representative shall have any rights to sell, assign, transfer or otherwise
convey the right to receive the payment of any Pension Benefit or Non-Pension
Benefit due hereunder, which payment and the right thereto are expressly
declared to be nonassignable and nontransferable. Any attempt to assign or
transfer the right to payment under the Plan shall be null and void and of no
effect.
6.2 Amendment and Termination. The Plan may be amended or terminated at
any time by the Board of Directors, provided that no amendment or termination
shall cause a forfeiture or reduction in any benefits accrued as of the date of
such amendment or termination.
6.3 No Guarantee of Employment. Participation hereunder shall not be
construed as creating any contract of employment between any Employing Company
and a Participant, nor shall it limit the right of an Employing Company to
suspend, terminate, alter, or modify, whether or not for cause, the employment
relationship between such Employing Company and a Participant.
6.4 Construction. This Plan shall be construed in accordance with and
governed by the laws of the State of Georgia, to the extent such laws are not
otherwise superseded by the laws of the United States.
15
<PAGE>
IN WITNESS WHEREOF, the Plan has been executed by duly authorized
officers of Southern Company Services, Inc., pursuant to resolutions of the
Board of Directors of the Company, this day of , 1996.
SOUTHERN COMPANY SERVICES, INC.
By:
[CORPORATE SEAL] C. Alan Martin
Vice President, Human Resources
Attest:
By:
Tommy Chisholm
Secretary
16
Exhibit 10(a)75
FIRST AMENDMENT TO THE
DEFERRED COMPENSATION PLAN
FOR THE DIRECTORS OF THE SOUTHERN COMPANY
WHEREAS, the Deferred Compensation Plan for Directors of The Southern
Company (the "Plan") was amended and restated effective October 20, 1986, which
amendment and restatement included changes to permit eligible Directors of The
Southern Company (the "Company") (1) to elect to treat compensation deferred
under the Plan as though invested in fixed income or common stock of The
Southern Company, (2) to receive distribution of deferred amounts in a lump sum
or up to ten (10) annual installments beginning not later than the second
anniversary of the termination of their membership on the Board of Directors,
and (3) to change the method of payment of their account balance under the Plan
from lump sum to installments, or vice versa, shortly before their termination
of membership on the Board of Directors; and
WHEREAS, the Board of Directors of the Company desires to amend the
Plan (1) to change the period of time during which a Director may elect to
change the method of payment of his account balance under the Plan, (2) to
require that any such change in the method of payment be contingent upon the
Director's completion of his term of membership on the Board of Directors,
except in the event of disability or death, and (3) to authorize the
Compensation Committee to accelerate installment distributions in its sole
discretion for cause upon request by a Director or his legal representative; and
WHEREAS, the Board of Directors of the Company has the authority to
amend the Plan from time to time in accordance with Section 9.3 of the Plan;
NOW, THEREFORE, effective January 19, 1987, the Board of Directors of
The Southern Company hereby amends the Deferred Compensation Plan for Directors
of The Southern Company as follows:
I.
The Plan shall be amended by deleting Section 6.5 of the Plan in its
entirety and substituting therefor the following language as Section 6.5
therein:
6.5 With the approval of the Compensation Committee, a
Director may amend a prior Deferral Election on a form prescribed by
the Compensation Committee not prior to the 390th day nor later than
the 360th day prior to his termination of membership on the Board of
Directors in order to change (a) the form and/or ((b) the time for
commencement of the distribution of his Deferred Compensation Account
in
<PAGE>
accordance with the terms of the Plan. Any such amendment to a prior
Deferral Election, as described in this Section 6.5, shall be
contingent upon the Director's completion of his term of membership on
the Board of Directors, except in the event of the disability or death
of such Director.
II.
Section 8.1 of the Plan shall be amended by deleting said Section in
its entirety and substituting therefor the following language as Section 8.1
therein:
8.1 When a Director terminates his membership on the Board of
Directors, said Director shall be entitled to receive the entire amount
and the Market Value of any shares of Common Stock (and fractions
thereof) reflected in his Deferred Compensation Account payable in cash
in accordance with his Deferral Election. No portion of a Director's
Deferred Compensation Account shall be distributed in Common Stock. In
the event a Director shall have elected to receive the balance of his
Deferred Compensation Account in a lump sum, distribution shall be made
on the first day of the month selected by the Director in accordance
with the terms of the Plan, or as soon as reasonably possible
thereafter. In the event the Director shall have elected to receive
annual installments, the first payment shall be on the first day of the
month selected by the Director, or as soon as reasonably possible
thereafter, and shall be an amount equal to the balance in the
Director's Deferred Compensation Account on such date divided by the
number of annual installment payments. Each subsequent annual payment
shall be an amount equal to the balance of the Director's Account on
the payment date divided by the number of remaining annual payments and
shall be paid on the anniversary of the preceding payment date.
Notwithstanding a Director's election to receive his Deferred
Compensation Account balance in annual installments, the Compensation
Committee, in its sole discretion upon request of the Director or his
legal representative, may accelerate the payment of any such
installments for cause. The Market Value of any shares of Common Stock
credited to a Director's Deferred Compensation Account shall be
determined as of the twenty-fifth (25th) day of the month immediately
preceding the date of any lump sum or installment distribution.
-2-
<PAGE>
III.
Except as amended by this First Amendment, the Plan shall remain in
full force and effect as amended and restated by the Company effective October
20, 1986.
IN WITNESS WHEREOF, this First Amendment has been executed pursuant to
resolutions of the Board of Directors of The Southern Company, this ____ day of
_____________________, 19__.
THE SOUTHERN COMPANY
By:
Robert H. Radcliff, Jr.
Chairman
Compensation Committee
Attest:
By:
Tommy Chisholm
Secretary
The Southern Company
[CORPORATE SEAL]
-3-
<PAGE>
SECOND AMENDMENT
TO THE DEFERRED COMPENSATION PLAN
FOR THE DIRECTORS OF THE SOUTHERN COMPANY
WHEREAS, the Board of Directors of The Southern Company (the "Company")
heretofore adopted the amendment and restatement of the Deferred Compensation
Plan for the Directors of The Southern Company (the "Plan") effective as of
October 20, 1986; and
WHEREAS, the Board of Directors of the Company desires to amend the
Plan to comply with changes in the Securities and Exchange Act of 1934; and
WHEREAS, under Section 9.3 of the Plan, the Board of
Directors has the authority to amend the Plan at any time;
NOW THEREFORE, effective as of the date of execution, the Board of
Directors hereby amends the Plan as follows:
1.
Section 6.5 of the Plan shall be amended by deleting said Section in
its entirety and substituting therefore the following language:
6.5 Except as provided below, with the approval of the Compensation
Committee, a Director may amend a prior Deferral Election on a form prescribed
by the Compensation Committee not prior to the 390th day nor later than the
360th day prior to his termination of membership on the Board of Directors in
order to change (a) the form, and/or (b) the time for commencement of the
distribution of his Deferred Compensation Account in accordance with the terms
of the Plan; provided, however, that any Director who is required to file
reports pursuant to Section 16(a) of the Securities and Exchange Act of 1934, as
amended, with respect to equity securities of the Company shall not be permitted
to amend his Deferral Election during any time period for which such Director is
required to file any such reports with respect to the portion of his Deferred
Compensation Account invested in accordance with the provisions of Section 7.3
of the Plan. Any such amendment to a prior Deferral Election, as described in
this Section 6.5, shall be contingent upon the Director's completion of his term
of membership on the Board of Directors, except in the event of the disability
or death of such Director.
2.
Except as amended herein by this Second Amendment, the Plan shall
remain in full force and effect as adopted and amended by the Company prior to
the adoption of this Second Amendment.
<PAGE>
IN WITNESS WHEREOF, this Second Amendment has been executed pursuant to
resolutions of the Board of Directors of The Southern Company this day of , 19 ,
to be effective as of the date of execution.
THE SOUTHERN COMPANY
By:
Its:
Attest:
By:
Its:
(CORPORATE SEAL]
Exhibit 10(a)77
THE SOUTHERN COMPANY
DEFERRED COMPENSATION PLAN
January 1, 1996
<PAGE>
THE SOUTHERN COMPANY
DEFERRED COMPENSATION PLAN
PAGE
ARTICLE I Purpose and Adoption of Plan............................... 1
ARTICLE II Definitions................................................ 2
ARTICLE III Administration of Plan..................................... 6
ARTICLE IV Eligibility................................................ 9
ARTICLE V Election for Deferral of Payment........................... 10
ARTICLE VI Deferred Compensation Accounts............................. 13
ARTICLE VII Distribution of Deferred
Compensation Accounts...................................... 16
ARTICLE VIII Miscellaneous Provisions................................... 19
i
<PAGE>
THE SOUTHERN COMPANY
DEFERRED COMPENSATION PLAN
ARTICLE I
Purpose and Adoption of Plan
1.1 Adoption: Southern Company Services, Inc. and the other Employing
Companies established the Deferred Compensation Plan for The Southern Electric
System effective October 1, 1988. The Plan was amended effective October 1, 1988
and March 1, 1993. This amendment and restatement of the Plan shall be effective
January 1, 1996, and except as otherwise provided herein, the terms of the Plan
as in effect prior to January 1, 1996 shall continue to be applicable to
deferrals made pursuant to the Plan prior to January 1, 1996.
1.2 Purpose: The Plan is designed to permit a select group of
management or highly compensated employees to elect to defer a portion of their
regular compensation during each payroll period and to defer all or a portion of
certain short-term and long-term incentive payments until their death,
disability, retirement, or termination of employment with their Employing
Company. The Plan shall be an unfunded deferred compensation arrangement whose
benefits shall be paid solely from the general assets of the Employing
Companies.
1
<PAGE>
ARTICLE II
Definitions
For purposes of the Deferred Compensation Plan the following terms
shall have the following meanings unless a different meaning is plainly required
by the context:
2.1 "Account" shall mean the account or accounts established and
maintained by the Company or the Employing Company to reflect the interest of a
Participant in the Plan resulting from a Participant's deferred Compensation or
Incentive Pay and adjustments thereto to reflect income, gains, losses, and
other
credits or charges.
2.2 "Administrative Committee" shall mean the committee
referred to in Section 3.1.
2.3 "Board of Directors" shall mean the Board of Directors of
the Company.
2.4 "Closing Price" shall mean the closing price on any trading day of
a share of the Common Stock based on consolidated trading as defined by the
Consolidated Tape Association and reported as part of the consolidated trading
prices of New York Stock Exchange listed securities.
2.5 "Common Stock" shall mean the common stock of The
Southern Company.
2.6 "Company" shall mean Southern Company Services, Inc.
2
<PAGE>
2.7 "Compensation" shall mean the monthly rate of an Employee's base
wages or salary paid by any Employing Company to an Employee, including amounts
contributed by an Employing Company to the Employee Savings Plan as Elective
Employer Contributions, as said term is defined in Section 4.1 therein, pursuant
to the Employee's exercise of his deferral option made in accordance with
Section 401(k) of the Internal Revenue Code and amounts contributed by an
Employing Company to The Southern Company Flexible Benefits Plan on behalf of
the Employee pursuant to his salary reduction election under such plan; but
disregarding overtime, such amounts which are reimbursements to an Employee paid
by any Employing Company including, but not limited to, reimbursement for such
items as moving expenses, automobile expenses, tax preparation expenses, travel
and entertainment expenses, and health and life insurance premiums.
2.8 "Deferral Election" shall mean the Participant's written election
to defer a portion of his Compensation pursuant to Article V.
2.9 "Effective Date" shall mean the first day of the first payroll
period the Administrative Committee shall permit a Participant to defer
Compensation under the Plan.
2.10 "Employee" shall mean any person who is currently
employed by an Employing Company.
2.11 "Employee Savings Plan" shall mean The Southern Company Employee
Savings Plan, as amended from time to time.
3
<PAGE>
2.12 "Employee Stock Ownership Plan' shall mean The Southern
Company Employee Stock Ownership Plan, as amended from time to
time.
2.13 "Employing Company" shall mean the Company, or any affiliate or
subsidiary (direct or indirect) of The Southern Company, which the Board of
Directors may from time to time determine to bring under the Plan and which
shall adopt the Plan, and any successor of any of them.
2.14 "Enrollment Date" shall mean the Effective Date, January 1 of each
Plan Year, and such other dates as may be determined from time to time by the
Administrative Committee.
2.15 "Incentive Pay" shall mean such long-term or short-term incentive
pay that the Administrative Committee shall permit to be deferred under this
Plan for any Plan Year.
2.16 "Investment Election" shall mean the Participant's written
election to have his deferred Compensation invested pursuant to Section 6.2 or
Section 6.3.
2.17 "Participant" shall mean an Employee or former Employee of an
Employing Company who is eligible to receive benefits under the Plan.
2.18 "Pension Plan" shall mean the defined benefit pension plan
maintained by the Employing Company of the Participant, as amended from time to
time.
4
<PAGE>
2.19 "Plan" shall mean The Southern Company Deferred Compensation Plan,
as amended from time to time. Prior to this amendment and restatement, the Plan
was entitled the Deferred Compensation Plan for The Southern Electric System.
2.20 "Plan Year" shall mean the twelve (12) month period commencing
January 1st and ending on the last day of December next following, except for
the first Plan Year which shall begin on the Effective Date and end on the last
day of the calendar year in which the Effective Date occurs.
2.21 "Retirement Income" shall have the same meaning as set
forth in the Pension Plan.
2.22 "Supplemental Benefit Plan" shall mean the Supplemental
Benefit Plan of the Employing Company and the Supplemental
Executive Retirement Plan of Savannah Electric and Power Company,
as amended from time to time.
Where the context requires, the definitions of all terms set forth in
the Pension Plan, Employee Savings Plan, the Employee Stock Ownership Plan, and
the Supplemental Benefit Plan shall apply with equal force and effect for
purposes of interpretation and administration of the Plan, unless said terms are
otherwise specifically defined in the Plan. The words in the masculine gender
shall include the feminine and neuter genders and words in the singular shall
include the plural and words in the plural shall include the singular.
5
<PAGE>
ARTICLE III
Administration of Plan
3.1 The general administration of the Plan shall be placed in the
Administrative Committee. The Administrative Committee shall consist of the Vice
President, Human Resources of The Southern Company, the Director, System
Compensation and Benefits of The Southern Company and the Vice President and
Controller of Southern Company Services, Inc. Any member may resign or be
removed by the Board of Directors and new members may be appointed by such Board
of Directors, if necessary. The Administrative Committee shall be chaired by the
Vice President, Human Resources of The Southern Company and may select a
Secretary (who may, but need not, be a member of the Administrative Committee)
to keep its records or to assist it in the discharge of its duties. A majority
of the members of the Administrative Committee shall constitute a quorum for the
transaction of business at any meeting. Any determination or action of the
Administrative Committee may be made or taken by a majority of the members
present at any meeting thereof, or without a meeting by resolution or written
memorandum concurred in by a majority of the members.
3.2 No member of the Administrative Committee shall receive
any compensation from the Plan for his service.
6
<PAGE>
3.3 The Administrative Committee shall administer the Plan in
accordance with its terms and shall have all powers necessary to carry out the
provisions of the Plan more particularly set forth herein. It shall interpret
the Plan and shall determine all questions arising in the administration,
interpretation and application of the Plan. Any such determination by it shall
be conclusive and binding on all persons. It may adopt such regulations as it
deems desirable for the conduct of its affairs. It may appoint such accountants,
counsel, actuaries, specialists and other persons as it deems necessary or
desirable in connection with the administration of this Plan, and shall be the
agent for the service of process.
3.4 The Administrative Committee shall be reimbursed by the Employing
Companies for all reasonable expenses incurred by it in the fulfillment of its
duties. Such expenses shall include any expenses incident to its functioning,
including, but not limited to, fees of accountants, counsel, actuaries, and
other specialists, and other costs of administering the Plan.
3.5 (a) The Administrative Committee is responsible for the daily
administration of the Plan. It may appoint other persons or entities to perform
any of its fiduciary functions. The Administrative Committee and any such
appointee may employ advisors and other persons necessary or convenient to help
it carry out its duties, including its fiduciary duties. The Administrative
Committee shall review the work and performance of each such appointee, and
shall have the right to remove any such appointee
7
<PAGE>
from his position. Any person, group of persons or entity may
serve in more than one fiduciary capacity.
(b) The Administrative Committee shall maintain accurate and
detailed records and accounts of Participants and of their rights under the Plan
and of all receipts, disbursements, transfers and other transactions concerning
the Plan. Such accounts, books and records relating thereto shall be open at all
reasonable times to inspection and audit by the Board of Directors and by
persons designated thereby.
(c) The Administrative Committee shall take all steps
necessary to ensure that the Plan complies with the law at all times. These
steps shall include such items as the preparation and filing of all documents
and forms required by any governmental agency; maintaining of adequate
Participants' records; recording and transmission of all notices required to be
given to Participants and their Beneficiaries; the receipt and dissemination, if
required, of all reports and information received from an Employing Company;
securing of such fidelity bonds as may be required by law; and doing such other
acts necessary for the proper administration of the Plan. The Administrative
Committee shall keep a record of all of its proceedings and acts, and shall keep
all such books of account, records and other data as may be necessary for proper
administration of the Plan. The Administrative Committee shall notify the
Company upon its request of any action taken by it, and when required, shall
notify any other interested person or persons.
8
<PAGE>
ARTICLE IV
Eligibility
4.1 Any Employee whose compensation equals or exceeds such minimum
amount as may be established by the Administrative Committee from time to time,
may elect to participate in the Plan beginning on any Enrollment Date by
electing to have his Compensation and/or Incentive Pay reduced and such amounts
contributed to the Plan in accordance with Article V, and directing the
investment of such contributions in accordance with Article VI. The
Administrative Committee shall be authorized to establish the minimum
compensation required for eligibility to participate in the Plan to be effective
as of the first day of the next succeeding Plan Year.
4.2 Notwithstanding the above, the Administrative Committee shall be
authorized to modify the minimum compensation amount and rescind the eligibility
of any Participant if necessary to insure that the Plan is maintained primarily
for the purpose of providing deferred compensation to a select group of
management or highly compensated employees under the Employee Retirement Income
Security Act of 1974, as amended.
4.3 The Administrative Committee shall have the authority to permit, if
it deems appropriate, separate Deferral Elections under Article V of the Plan,
Investment Elections under Article VI of the Plan and Distribution Elections
under Article VII of the Plan for Compensation and Incentive Pay, respectively.
9
<PAGE>
ARTICLE V
Election for Deferral of Payment
5.1 A Participant may elect to defer payment of a portion of his
Compensation otherwise payable to him during each payroll period of the next
succeeding Plan Year by any whole percentage not to exceed fifty percent (50%)
of his Compensation, or such greater or lesser amount as shall be determined by
the Administrative Committee from time to time, such amount to be credited to
his Account under the Plan. A Participant may also elect to defer payment of up
to one hundred percent (100%), by whole percentages, of any Incentive Pay
otherwise payable to him.
5.2 An Account shall be established for each Participant by the Company
or the Employing Company as of the effective date of such Participant's initial
Deferral Election.
5.3 The Deferral Election shall be made in writing on a form prescribed
by the Company and said Deferral Election shall state:
(a) That the Participant wishes to make an election to
defer the receipt of a portion of his Compensation
and/or Incentive Pay;
(b) The whole percentage of the Compensation and/or
Incentive Pay to be deferred; and
(c) The method of payment, which shall be the payment
of a lump-sum or a series of annual payments not to
exceed ten (10) years.
10
<PAGE>
5.4 The initial Deferral Election of a new Participant shall be made by
written notice signed by the Participant and delivered to the Participant's
Employing Company by the date established by the Administrative Committee and
shall be effective on the next occurring Enrollment Date. Any modification or
revocation of the most recent Deferral Election shall be made by written notice
signed by the Participant and delivered to the Participant's Employing Company
by the date established by the Administrative Committee and shall be effective
on the first day of such succeeding Plan Year. A Deferral Election with respect
to the deferral of future Compensation or Incentive Pay shall be an annual
election for each Plan Year unless otherwise modified or revoked as provided
herein. The termination of participation in the Plan shall not affect
Compensation or Incentive Pay previously deferred by a Participant under the
Plan.
5.5 Notwithstanding the provisions of Section 5.4 of the Plan, the
Administrative Committee, in its sole discretion upon written application by a
Participant, may authorize the suspension of a Participant's Deferral Election
in the event of an unforeseen emergency or hardship of the Participant. A
suspension will be on account of hardship if it is necessary in light of
immediate and heavy financial needs of the Participant and such needs cannot
reasonably be met from other resources of the Participant. For this purpose,
amounts held in the Participant's accounts in the Employee Savings Plan and the
Employee Stock Ownership Plan shall
11
<PAGE>
not be deemed to be reasonably available. Any suspension authorized by the
Administrative Committee shall become effective as of the first payroll period
beginning thirty (30) days after receipt by the Participant's Employing Company
of the suspension application, or as soon as practicable after the receipt of
such application. Such suspension shall be effective for the remainder of the
Plan Year and shall be deemed an annual election for each succeeding Plan Year
unless modified under Section 5.4 of the Plan.
5.6 The initial Deferral Election specifying the method of
distribution, whether it be lump sum or annual installments not to exceed ten
(10), may not be revoked and shall govern the distribution of a Participant's
Account. Notwithstanding the foregoing, and except as provided below, in the
sole discretion of the Administrative Committee upon application by a
Participant, a Participant's Deferral Election may be amended not prior to the
395th day nor later than the 365th day prior to a distribution of his Account in
accordance with the terms of the Plan; provided, however, that any Participant
who is required to file reports pursuant to Section 16(a) of the Securities and
Exchange Act of 1934, as amended, with respect to equity securities of The
Southern Company shall not be permitted to amend his Deferral Election during
any time period for which such Participant is required to file any such reports
with respect to the portion of his deferred Compensation invested in accordance
with the provisions of Section 6.3 of the Plan. Each Participant making a
Deferral Election in accordance with this Article V and his successors shall be
bound as
12
<PAGE>
to any action taken pursuant to the terms of the Participant's
Deferral Election and the Plan.
ARTICLE VI
Deferred Compensation Accounts
6.1 The Compensation deferred in accordance with Article V, and,
pursuant to each Participant's Investment Election, the amounts computed in
accordance with Section 6.2 and/or the number of shares computed in accordance
with Section 6.3 shall be credited to the Participant's Account.
6.2 The Account of each Participant who has elected to defer
Compensation and/or Incentive Pay pursuant to the Plan for a Plan Year in
accordance with this Section 6.2 shall be credited as of the last day of each
calendar quarter with an amount computed by the Company by treating the Account
balance as of the first day of such calendar quarter as a sum certain to which
the Employing Company will add in lieu of interest an amount equal to the prime
rate of interest set by Wachovia Bank of Georgia, N.A. or its successor.
Interest will be compounded quarterly at the end of each succeeding calendar
quarter on any balance until such amount is fully distributed. The prime rate in
effect at the close of business on the first business day of each calendar
quarter shall be deemed the prime rate in effect for such calendar quarter.
13
<PAGE>
6.3 The Account of each Participant who has elected to defer
Compensation and/or Incentive Pay pursuant to the Plan for a Plan Year in
accordance with this Section 6.3 shall be credited as of the last day of the
calendar quarter with the number of shares (including fractional shares) of
Common Stock which could have been purchased on the last day of such calendar
quarter, based upon the Common Stock's Closing Price on the last trading day of
such calendar quarter. As of the last day of each calendar quarter in which
occurs the payment of dividends on the Common Stock there shall be credited with
respect to shares of Common Stock in the Participant's Account as of the first
day of such calendar quarter such additional shares (including fractional
shares) of Common Stock as follows:
(a) In the case of cash dividends, such additional shares
as could be purchased at the Closing Price on the
last trading day during the calendar quarter in which
the payment date occurs with the dividends which
would have been payable if the credited shares had
been outstanding;
(b) In the case of dividends payable in property other
than cash or Common Stock, such additional shares as
could be purchased at the Closing Price on the last
trading day during the calendar quarter in which the
payment date occurs with the fair market value of the
property which would have been payable if the
credited shares had been outstanding; or
14
<PAGE>
(c) In the case of dividends payable in Common Stock,
such additional shares as would have been payable on
the credited shares if they had been outstanding.
6.4 The Investment Election by a Participant with respect to his
Account shall be made in writing on a form prescribed by the Company. Any
Investment Election shall be delivered to the Participant's Employing Company
prior to the first (1st) day of the month immediately prior to his Enrollment
Date or the next succeeding Plan Year, as appropriate, and shall be effective on
such Enrollment Date or the first day of such succeeding Plan Year. The
Investment Election made in accordance with this Article VI shall be irrevocable
and shall continue from Plan Year to Plan Year unless the Participant changes
the Investment Election regarding future deferred Compensation or Incentive Pay
by submitting a written request to his Employing Company on a form prescribed by
the Company. Any such change shall become effective as of the first day of the
Plan Year next following the Plan Year in which such request is submitted to an
Employing Company. No transfer of amounts between investment options shall be
permitted under the Plan.
6.5 At the end of each Plan Year, a report shall be issued to each
Participant who has an Account and said report will set forth the amount and the
market value of any shares of Common Stock reflected in such Account.
15
<PAGE>
ARTICLE VII
Distribution of Deferred Compensation Accounts
7.1 When a Participant retires or terminates his employment with an
Employing Company, said Participant shall be entitled to receive the value of
any deferrals and any interest thereon credited to his Account under Section 6.2
of the Plan, and the market value of any shares of Common Stock (and fractions
thereof) reflected in his Account maintained by the Company that has established
an Account for his benefit in accordance with Section 6.3 of the Plan, and any
replacement benefits provided under Sections 6.2, 6.3 and 6.4 of the Plan prior
to January 1, 1996. Such distribution shall be made not later than sixty (60)
days following the close of the calendar quarter in which his termination of
employment occurs, or as soon as reasonably practicable thereafter. The transfer
by a Participant between companies in The Southern Company shall not be deemed
to be a termination of employment with an Employing Company.
7.2 With regard to any distribution made under this Article, the market
value of any shares of Common Stock credited to a Participant's Account shall be
based on the Closing Price of such Common Stock on the last trading day of the
calendar quarter immediately preceding a distribution and the value of any
deferral and any interest thereon shall be based on the value of such deferral
plus interest thereon credited as of the last day of the
16
<PAGE>
calendar quarter immediately preceding a distribution. No portion
of a Participant's Account shall be distributed in Common Stock.
7.3 In the event a Participant elected to receive the distribution of
his Account in annual installments, the first payment shall be made not later
than sixty (60) days following the close of the calendar quarter in which his
termination of employment occurs, or as soon as reasonably practicable
thereafter, and shall be an amount equal to the balance in the Participant's
Account divided by the number of annual installment payments. Each subsequent
annual payment shall be an amount equal to the balance in the Participant's
Account as of the close of the calendar quarter preceding the payment date,
divided by the number of the remaining annual payments and shall be due on the
anniversary of the preceding payment date.
7.4 Upon the death of a Participant, or a former Participant prior to
the payment of all amounts and the market value of any shares of Common Stock
(and fractions thereof) credited to said Participant's Account, the unpaid
balance shall be paid in the sole discretion of the Administrative Committee (a)
in a lump sum to the designated beneficiary of a Participant or former
Participant within sixty (60) days following the close of the calendar quarter
in which the Administrative Committee is provided evidence of the Participant's
death (or as soon as reasonably practicable thereafter) or (b) in accordance
with the Deferral Election made by such Participant or former Participant. In
the event a beneficiary designation is not on file or the designated beneficiary
is
17
<PAGE>
deceased or cannot be located, payment will be made to the estate of the
Participant or former Participant.
7.5 The beneficiary designation may be changed by the
Participant or former Participant at any time without the consent
of the prior beneficiary.
7.6 Upon the total disability of a Participant or former Participant,
as determined by the Social Security Administration, the unpaid balance of his
Account shall be paid in the sole discretion of the Administrative Committee (a)
in a lump sum to the Participant, or former Participant, or his legal
representative within sixty (60) days following the close of the calendar
quarter in which the Administrative Committee receives notification of the
determination of disability by the Social Security Administration (or as soon as
reasonable practicable thereafter) or (b) in accordance with the Deferral
Election made by such Participant or former Participant.
7.7 The Administrative Committee in its sole discretion upon
application made by the Participant, a designated beneficiary, or their legal
representative, may determine to accelerate payments or, in the event of death
or total disability (as determined by Social Security Administration), to extend
or otherwise make payments in a manner different from the manner in which such
payment would be made under the Participant's Deferral Election in the absence
of such determination.
18
<PAGE>
ARTICLE VIII
Miscellaneous Provisions
8.1 Neither the Participant, his beneficiary, nor his legal
representative shall have any rights to commute, sell, assign, transfer or
otherwise convey the right to receive any payments hereunder, which payments and
the rights thereto are expressly declared to be nonassignable and
nontransferable. Any attempt to assign or transfer the right to payments of this
Plan shall be void and have no effect.
8.2 An Employing Company maintaining an Account for the benefit of a
Participant shall not reserve or specifically set aside funds for the payment of
its obligations under the Plan, and such obligations shall be paid solely from
the general assets of the Employing Companies. Notwithstanding that a
Participant shall be entitled to receive the balance of his Account under the
Plan, the assets from which such amount shall at all times be subject to the
claims of the creditors of the Participants' Employing Companies.
8.3 The Plan may be amended, modified, or terminated by the Board of
Directors in its sole discretion at any time and from time to time; provided,
however, that no such amendment, modification, or termination shall impair any
rights to Compensation which has been deferred under the Plan prior to such
amendment, modification, or termination. The Plan may also be amended or
modified by the
19
<PAGE>
Administrative Committee if such amendment or modification does not involve a
substantial increase in cost to any Employing Company.
8.4 It is expressly understood and agreed that the payments made in
accordance with the Plan are in addition to any other benefits or compensation
to which a Participant may be entitled or for which he may be eligible, whether
funded or unfunded, by reason of his employment with any Employing Company.
8.5 There shall be deducted from each payment under the Plan the amount
of any tax required by any governmental authority to be withheld and paid over
by an Employing Company to such governmental authority for the account of the
person entitled to such distribution.
8.6 Any Compensation deferred by a Participant while employed by an
Employing Company shall not be considered "compensation," as the term is defined
in the Employee Savings Plan, the Employee Stock Ownership Plan, or the Pension
Plan. Distributions from a Participant's Account shall not be considered wages,
salaries or compensation under any other employee benefit plan.
8.7 No provision of this Plan shall be construed to affect in any
manner the existing rights of an Employing Company to suspend, terminate, alter,
modify, whether or not for cause, the employment relationship of the Participant
and his Employing Company.
8.8 This Plan, and all its rights under it, shall be governed by and
construed in accordance with the laws of the State of Georgia.
20
<PAGE>
IN WITNESS WHEREOF, the Plan has been executed pursuant to resolutions
of the Board of Directors of Southern Company Services, Inc., this ____ day of
_____________, 19__ to be effective as provided herein.
THE SOUTHERN COMPANY
By:
[CORPORATE SEAL] C. Alan Martin
Vice President, Human Resources
Attest:
By:
Tommy Chisholm
Secretary
21
Exhibit 10(a)79
FIRST AMENDMENT
TO THE OUTSIDE DIRECTORS STOCK PLAN
FOR SUBSIDIARIES OF THE SOUTHERN COMPANY
WHEREAS, the Board of Directors of The Southern Company (the "Company")
heretofore adopted the Outside Directors Stock Plan for Subsidiaries of The
Southern Company (the "Plan"), effective as of January 1, 1995; and
WHEREAS, the Board of Directors of the Company desires to amend the
Plan to clarify the market value of stock purchased on the open market pursuant
to the Plan; and
WHEREAS, pursuant to Section 6.2 of the Plan, the Board of Directors of
the Company has the authority to amend the Plan at any time, subject to
shareholder approval when required, which approval is not now required;
NOW THEREFORE, effective as of January 1, 1995, the Board of Directors
of the Company hereby amends the Plan as follows:
1.
Section 2.8 of the Plan shall be amended by deleting said Section in
its entirety and substituting therefore the following language:
2.8 "Market Value" shall mean the following:
(a) With respect to Stock that is issued by the Company,
the average of the high and low prices of the Stock, as
published in the Wall Street Journal in its report of
-------------------
New York Stock Exchange composite transactions, on the
date one day prior to the date of distribution as set
forth in Section 4.3(a) of the Plan (or the average of
the high and low sale prices on the trading day
immediately preceding such determination date if the
Stock is not traded on the date one day prior to the
date of distribution).
(b) With respect to Stock that is purchased on the open market,
the actual purchase price paid for such Stock on the date of
purchase.
<PAGE>
2.
Section 4.3(a) of the Plan shall be amended by deleting the second
sentence of Section 4.3(a) and substituting therefore the following language:
The amount of Stock to be distributed to a Participant shall
initially be determined by first dividing the Participant's
required and elected dollar amount of Stock compensation by
four (4) and then dividing such quarterly quotient by the
Market Value of the Stock. Subsequent distributions shall be
based on such quarterly quotient divided by the Market Value
of the Stock.
3.
Except as amended herein by this First Amendment, the Plan shall remain
in full force and effect as adopted by the Company prior to the adoption of this
First Amendment.
IN WITNESS WHEREOF, this First Amendment has been executed pursuant to
resolutions of the Board of Directors of The Southern Company this day of ,
1995, to be effective as of January 1, 1995.
THE SOUTHERN COMPANY
By:
Its:
Attest:
By:
Its:
(CORPORATE SEAL]
Exhibit 10(a)80
OUTSIDE DIRECTORS STOCK PLAN
FOR SUBSIDIARIES OF THE SOUTHERN COMPANY
Effective January 1, 1995
<PAGE>
OUTSIDE DIRECTORS STOCK PLAN
FOR SUBSIDIARIES OF THE SOUTHERN COMPANY
ARTICLE I - PURPOSE AND ADOPTION OF PLAN
1.1 Adoption. Subject to (a) the approval of the adoption by the Board
of Directors of The Southern Company ("Company") of the Outside Directors Stock
Plan for Subsidiaries of The Southern Company (the "Plan") by the shareholders
of the Company at the annual meeting thereof to be held on May 24, 1995, and (b)
the Company's receipt of the requisite approval of the issuance of the Stock
pursuant to the Plan by the Securities and Exchange Commission (the
"Commission") under the Public Utility Holding Company Act of 1935, as amended,
and the rules thereunder, The Southern Company hereby adopts the Outside
Directors Stock Plan for Subsidiaries of The Southern Company, effective January
1, 1995.
1.2 Purpose. The Plan is designed to more closely align the interests
of Directors of the System Companies (defined herein) with the interests of the
shareholders of the Company through ownership of the Company's common stock, par
value $5.00 per share (the "Stock").
<PAGE>
ARTICLE II - DEFINITIONS
2.1 "Affiliated Employer" shall mean any corporation which is a member
of the controlled group of corporations of which The Southern Company is the
common parent corporation.
2.2 "Board of Directors" shall mean the Board of Directors
of each System Company.
2.3 "Commission" shall mean the Securities and Exchange
Commission.
2.4 "Company" shall mean The Southern Company.
2.5 "Director" shall mean any person (a) who serves on the
Board of Directors of one or more System Companies on or after January 1, 1995;
and (b) who is not an active employee of The Southern Company or an Affiliated
Employer.
2.6 "Effective Date" shall mean January 1, 1995.
2.7 "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.
2.8 "Market Value" shall mean the average of the high and low prices of
the Stock, as published in the Wall Street Journal in its report of New York
Stock Exchange composite transactions, on the date such market value is to be
determined (or the average of the high and low sale prices on the trading day
immediately preceding such determination date if the Stock is not traded on the
applicable valuation date).
2.9 "Participant" shall mean each Director on the Board of Directors of
a System Company who meets the requirements of Section 3.1 of the Plan.
-3-
<PAGE>
2.10 "Plan" shall mean the Outside Directors Stock Plan for
Subsidiaries of The Southern Company, as amended from time to time.
2.11 "Plan Administrator" shall mean the Compensation
Committee of the Board of Directors of The Southern Company.
2.12 "Plan Year" shall mean the calendar year.
2.13 "Retainer Fee" shall mean the annual rate of the fees
paid to a Director for service on the Board of Directors of a System Company,
but excluding reimbursements for expenses and any fees or compensation for (a)
attendance at the meetings of the Board of Directors or any committee, (b)
service on a committee, and (c) service at the request of the Board of Directors
or a committee.
2.14 "Stock" shall mean the Company's common stock, par
value $5.00 per share.
2.15 "System Company" shall mean any affiliate or subsidiary of The
Southern Company which the Board of Directors of The Southern Company may from
time to time determine to bring under the Plan and which shall adopt the Plan,
and any successor of any of them. The System Companies that have adopted the
Plan are listed in Schedule A, attached hereto, as such Schedule may be amended
from time to time.
The masculine pronoun shall be construed to include the feminine
pronoun and the singular shall include the plural, where the context so
requires.
-4-
<PAGE>
ARTICLE III - ELIGIBILITY
3.1 Eligibility Requirements.
(a) Except as provided in Subsections (b) and (c) below, each Director
who serves on a Board of Directors of a System Company shall become a
Participant in the Plan on the first date such Director serves on the Board of
Directors of a System Company.
(b) For purposes of the initial Plan Year, a Director who serves on the
Board of Directors of Georgia Power Company or Alabama Power Company shall
become a Participant in the Plan on the Effective Date, subject to (1) approval
of the Plan by the shareholders of the Company at the annual meeting thereof to
be held on May 24, 1995, and (2) the Company's receipt of the requisite approval
of the Plan by the Commission under the Public Utility Holding Company Act of
1935, as amended, and the rules thereunder.
(c) For purposes of the initial Plan Year, a Director who serves on the
Board of Directors of Gulf Power Company, Mississippi Power Company or Savannah
Electric and Power Company shall become a Participant in the Plan on the later
of (1) the date the Plan is approved by the shareholders of the Company at the
annual meeting thereof to be held on May 24, 1995, and (2) the Company's receipt
of the requisite approval of the Plan by the Commission under the Public Utility
Holding Company Act of 1935, as amended, and the rules thereunder.
-5-
<PAGE>
ARTICLE IV - FORM AND TIME OF BENEFIT DISTRIBUTIONS
4.1 Stock Grant. Each Participant shall receive a portion of his annual
Retainer Fee in Stock, with the remainder of such annual Retainer Fee to be
payable, in increments elected by the Director in accordance with Section 4.2
below, in cash or in Stock. The portion of the annual Retainer Fee required to
be paid in Stock pursuant to this Section 4.1 shall be stated in Schedule B,
attached hereto, as such Schedule shall be amended from time to time.
4.2 Election to Determine Percentage or Amount of Compensation to be
Paid in Stock. Each Participant shall have a one-time opportunity to elect to
have the remaining portion of his Retainer Fee paid in cash or Stock of the
Company, or a combination thereof. Such election shall be made at the time
specified by the Plan Administrator on a form provided to the Participant by the
Plan Administrator, which form shall acknowledge that once made, such election
is irrevocable. Notwithstanding the foregoing, if, when and as permitted by the
Commission, the Plan Administrator may allow a Participant to elect to change
the amount of their Retainer Fee paid in Stock; provided that such election
shall not affect the dollar amount of such Participant's required Stock
distribution stated in Schedule B attached hereto. Nothing contained in this
Section 4.2 shall be interpreted in such a manner as would disqualify the Plan
from treatment as a "formula plan" under Rule 16b-3, as promulgated by
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<PAGE>
the Commission under the Exchange Act, as that rule may be amended from time to
time.
4.3 Amount and Date of Payment for Stock Compensation.
(a) For any Plan Year in which a Director is a Participant
for the full Plan Year, any Stock compensation due a Participant pursuant to
Sections 4.1 and 4.2 above shall be payable on a quarterly basis, with the first
such quarterly distribution being made on April 1 and succeeding quarterly
distributions being made on July 1, October 1, and January 1. The amount of
Stock to be distributed to a Participant shall initially be determined by first
dividing the Participant's required and elected dollar amount of Stock
compensation by four (4) and then dividing such quarterly quotient by the market
value of the Stock on the date one day prior to the date of distribution, with
subsequent distributions based on such quarterly quotient divided by the market
value of the Stock on the date one day prior to the date of each subsequent
distribution.
(b) Notwithstanding the foregoing, for purposes of the 1995
Plan Year, Stock distributions shall be made as follows:
(1) For Participants who are Directors of Alabama Power
Company or Georgia Power Company on January 1, 1995, no Stock distributions
shall be made prior to receipt of the requisite approval described in Section
1.1; provided, however, that once the requisite approval of the Plan is
received, the Stock distribution shall be made on the first quarterly date
following such approval and shall include any Stock distributions
-7-
<PAGE>
which would have been made had the requisite approval been obtained on the
Effective Date. The Stock distributions to be made in accordance with this
Section 4.3(b)(1) shall be valued in accordance with the provisions of Section
4.3(a).
(2) For Participants who are Directors of Gulf Power Company,
Mississippi Power Company or Savannah Electric and Power Company, no Stock
distributions shall be made prior to receipt of the requisite approval described
in Section 1.1; provided, however, that once the requisite approval of the Plan
is received, the Stock distribution to be made to Participants pursuant to this
Section 4.3(b)(2) shall be made on the first quarterly date following such
approval. The Stock distributions to be made pursuant to this Section 4.3(b)(2)
shall not include any Stock distributions attributable to any calendar quarter
prior to the time the requisite approval is received. The Stock distributions to
be paid in accordance with this Section 4.3(b)(2) shall be valued in accordance
with the provisions of Section 4.3(a).
4.4 Death Benefits. No benefits shall be payable under the
Plan to any beneficiary of a Participant following a
Participant's death.
-8-
<PAGE>
ARTICLE V - ADMINISTRATION OF PLAN
5.1 Administrator. The general administration of the Plan
shall be the responsibility of the Compensation Committee of the
Board of Directors of The Southern Company, as Plan
Administrator.
5.2 Powers. The Plan Administrator shall administer the Plan in
accordance with its terms and shall have all powers necessary to carry out the
provisions of the Plan more particularly set forth herein. It shall interpret
the Plan and shall have the discretion to determine all questions arising in the
administration, interpretation and application of the Plan, including any
ambiguities contained herein or any questions of fact. Any such determination by
it shall be conclusive and binding on all persons. It may adopt such regulations
as it deems desirable for the conduct of its affairs. It may appoint such
accountants, counsel, actuaries, specialists and other persons as it deems
necessary or desirable in connection with the administration of this Plan, and
shall be the agent for the service of process.
5.3 Duties of the Plan Administrator.
(a) The Plan Administrator is responsible for the daily
administration of the Plan. It may appoint other persons or
entities to perform any of its fiduciary functions. The Plan
Administrator and any such appointee may employ advisors and
other persons necessary or convenient to help it carry out its
duties, including its fiduciary duties. The Plan Administrator
-9-
<PAGE>
shall have the right to remove any such appointee from his position. Any person,
group of persons or entity may serve in more than one fiduciary capacity.
(b) The Plan Administrator shall maintain accurate and detailed records
and accounts of Participants and of their rights under the Plan and of all
receipts, disbursements, transfers and other transactions concerning the Plan.
Such accounts, books and records relating thereto shall be open at all
reasonable times to inspection and audit by persons designated by the Board of
Directors of each System Company.
(c) The Plan Administrator shall take all steps necessary to ensure
that the Plan complies with the law at all times. These steps shall include such
items as the preparation and filing of all documents and forms required by any
governmental agency; maintaining of adequate Participants' records; recording
and transmission of all notices required to be given to Participants; the
receipt and dissemination, if required, of all reports and information received
from a System Company; securing of such fidelity bonds as may be required by
law; and doing such other acts necessary for the proper administration of the
Plan. The Plan Administrator shall keep a record of all of its proceedings and
acts, and shall keep all such books of account, records and other data as may be
necessary for proper administration of the Plan.
5.4 Indemnification. The System Companies shall indemnify
the Plan Administrator against any and all claims, losses,
-10-
<PAGE>
damages, expenses and liability arising from any action or failure to act,
except when the same is finally judicially determined to be due to gross
negligence or willful misconduct. The System Companies may purchase at their own
expense sufficient liability insurance for the Plan Administrator to cover any
and all claims, losses, damages and expenses arising from any action or failure
to act in connection with the execution of the duties as Plan Administrator.
-11-
<PAGE>
ARTICLE VI - MISCELLANEOUS
6.1 Assignment. Neither the Participant nor his legal representative
shall have any rights to sell, assign, transfer or otherwise convey the right to
receive the payment of any benefit due hereunder, which payment and the right
thereto are expressly declared to be nonassignable and nontransferable. Any
attempt to assign or transfer the right to payment under the Plan shall be null
and void and of no effect.
6.2 Amendment and Termination. The Plan may be wholly or partially
amended or otherwise modified, suspended or terminated at any time by the Board
of Directors of The Southern Company or by the Compensation Committee with the
approval of The Southern Company Board of Directors, upon execution of a duly
authorized written document; provided, however, that, without the approval of
the shareholders of the Company entitled to vote thereon, no amendment may be
made which would, absent such shareholder approval, disqualify the Plan for
coverage under Rule 16b-3, as promulgated by the Commission under the Exchange
Act, as that rule may be amended from time to time; and provided further that
the Plan may not be amended more than once every six (6) months unless such
amendment is made in order to comply with changes to either the Internal Revenue
Code of 1986, as amended, or the Employee Retirement Income Security Act of
1974, as amended, and the rules thereunder. Notwithstanding the foregoing, no
such amendment or termination shall impair any rights to payments to
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<PAGE>
which a Participant may be entitled prior to the effective date
of such amendment or termination.
6.3 No Guarantee of Continued or Future Service on a Board of
Directors. Participation hereunder shall not be construed as creating a right in
any Director to continued service or future service on the Board of Directors of
any System Company. Participation hereunder does not constitute an employment
contract between any Director and any System Company.
6.4 Construction. This Plan shall be construed in accordance with and
governed by the laws of the State of Georgia, to the extent such laws are not
otherwise superseded by the laws of the United States.
IN WITNESS WHEREOF, the Board of Directors of The Southern Company,
through its duly authorized officers, has adopted this Outside Directors Stock
Plan for Subsidiaries of The Southern Company this day of , 1994, to be
effective as provided herein.
THE SOUTHERN COMPANY:
(CORPORATE SEAL)
By:______________________________
Its:
Attest:
By: ________________________
Its:
-13-
<PAGE>
OUTSIDE DIRECTORS STOCK PLAN
FOR SUBSIDIARIES OF THE SOUTHERN COMPANY
SCHEDULE A
The System Companies as of January 1, 1995 are:
Alabama Power Company
Georgia Power Company
Gulf Power Company
Mississippi Power Company
Savannah Electric and Power Company
<PAGE>
OUTSIDE DIRECTORS STOCK PLAN
FOR SUBSIDIARIES OF THE SOUTHERN COMPANY
SCHEDULE B
As of January 1, 1995
The portion of a Participant's Retainer Fee required to be distributed in common
stock of The Southern Company shall be determined in accordance with the
following schedule:
Dollar Amount
Company of Required Stock Distribution
Alabama Power Company $3000.00
Georgia Power Company $3000.00
Gulf Power Company $2000.00
Mississippi Power Company $2000.00
Savannah Electric and Power $2000.00
Company
<PAGE>
FIRST AMENDMENT
TO THE SOUTHERN COMPANY
OUTSIDE DIRECTORS STOCK PLAN
WHEREAS, the Board of Directors of The Southern Company (the "Company")
heretofore adopted The Southern Company Outside Directors Stock Plan (the
"Plan"), effective as of January 1, 1994; and
WHEREAS, the Board of Directors of the Company desires to amend the
Plan to clarify the dates of payment for stock compensation and the market value
of stock that is purchased on the open market; and
WHEREAS, pursuant to Section 7.1 of the Plan, the Board of Directors
has the authority to amend the Plan at any time, subject to shareholder approval
when required, which approval is not now required;
NOW THEREFORE, effective as of the date of execution, the Board of
Directors hereby amends the Plan as follows:
1.
Section 6.1 of the Plan shall be amended by deleting said Section in
its entirety and substituting therefore the following language:
6.1 Date of Payment for Stock Compensation.
(a) Any stock compensation due to a director shall be payable on a
quarterly basis, with the first such quarterly distribution being made on April
1 and succeeding quarterly distributions being made on July 1, October 1 and
January 1. The amount of stock to be distributed to a director shall initially
be determined by first dividing the director's required and elected dollar
amount of stock compensation by four (4) and then dividing such quarterly
quotient by the market value of the common stock of the Company (as determined
under subparagraph (b) below), with subsequent distributions based on such
quarterly quotient divided by the market value of the common stock of the
Company (as determined by subparagraph (b) below). Notwithstanding the
foregoing, for purposes of the 1994 calendar year, no stock distributions shall
be made prior to July 1, 1994; provided, however that the stock distribution to
be made on July 1, 1994 shall include both the April 1, 1994 and July 1, 1994
quarterly distributions with such distributions being valued in accordance with
the provisions of this Section 6.1.
<PAGE>
(b) For purposes of valuing the common stock of the Company in
accordance with Section 6.1(a) above, the term "market value" shall have the
following meaning:
(1) with respect to common stock of the Company that is issued
by the Company, the average of the high and low prices of the
common stock of the Company, as published in the Wall Street
Journal in its report of New York Stock Exchange composite
transactions, on the date one day prior to the date of
distribution as set forth in (a) above (or the average of the
high and low sale prices on the trading day immediately
preceding such determination date if the common stock of the
Company is not traded on the date one day prior to the date of
distribution).
(2) with respect to common stock of the Company that is
purchased on the open market, the actual purchase price paid
for such common stock on the date of purchase.
2.
Except as amended herein by this First Amendment, the Plan shall remain
in full force and effect as adopted by the Company prior to the adoption of this
First Amendment.
IN WITNESS WHEREOF, this First Amendment has been executed pursuant to
resolutions of the Board of Directors of The Southern Company this day of ,
1995, to be effective as of the date of execution.
THE SOUTHERN COMPANY
By:
Its:
Attest:
By:
Its:
(CORPORATE SEAL]
Exhibit 10(a)82
SECOND AMENDMENT TO
THE SOUTHERN COMPANY
EXECUTIVE STOCK PLAN
WHEREAS, the Board of Directors of The Southern Company (hereinafter
referred to as the "Company") heretofore established The Southern Company
Executive Stock Plan (hereinafter referred to as the "Plan") for the purpose of
(a) maximizing the long-term success of The Southern Company, (b) ensuring a
balanced emphasis on both current and long-term performance, (c) enhancing
participants' identification with shareholders' interests, and (d) facilitating
the attraction and retention of key individuals with outstanding ability; and
WHEREAS, the Company desires to amend the Plan to clarify the
Compensation Committee of the Board of Directors authority to determine who may
participate in the Plan; and
WHEREAS, the Company, through action of its Board of Directors, is
authorized pursuant to Section 8.5 of the Plan to amend the Plan at any time.
NOW THEREFORE, effective January 1, 1995, the Company hereby amends the
Plan as follows:
I.
Amend Section 3.1 of the Plan by deleting said Section in its entirety
and substituting the following in lieu thereof:
3.1 Eligibility. The Participants in the Plan shall be limited
to those Employees, as determined by the Committee, who have a
significant impact on the long-term performance and success of the
Company. Subject to the terms of the Plan, the Committee shall identify
individuals eligible to become Participants in the Plan, select from
time to time the Participants to whom Awards shall be granted and shall
determine the number of shares to be granted.
II.
Except as amended herein, the Plan shall remain in full force and
effect as maintained by the Company prior to the adoption of this Second
Amendment.
<PAGE>
IN WITNESS WHEREOF, The Southern Company, through its authorized
officers, has adopted this Second Amendment to The Southern Company Executive
Stock Plan this day of , 1995, to be effective as of January 1, 1995.
THE SOUTHERN COMPANY
By:
A.W. Dahlberg, President
ATTEST:
By:
Tommy Chisholm, Secretary
Exhibit 10(d)22
SUPPLEMENTAL BENEFIT PLAN
FOR
GULF POWER COMPANY
January 1, 1996
<PAGE>
SUPPLEMENTAL BENEFIT PLAN
FOR
GULF POWER COMPANY
Page
ARTICLE I - PURPOSE AND ADOPTION OF PLAN . . . . . . . . . . . . . 1
1.1 Adoption . . . . . . . . . . . . . . . . 1
1.2 Purpose. . . . . . . . . . . . . . . . . 1
ARTICLE II - DEFINITIONS . . . . . . . . . . . . . . . . . . . . . 1
2.1 Account. . . . . . . . . . . . . . . . . 1
2.2 Affiliated Employer. . . . . . . . . . . 2
2.3 Beneficiary. . . . . . . . . . . . . . . 2
2.4 Board of Directors . . . . . . . . . . . 2
2.5 Code . . . . . . . . . . . . . . . . . . 2
2.6 Common Stock . . . . . . . . . . . . . . 2
2.7 Company. . . . . . . . . . . . . . . . . 2
2.8 Deferred Compensation Plan . . . . . . . 2
2.9 Effective Date . . . . . . . . . . . . . 2
2.10 Employee . . . . . . . . . . . . . . . . 2
2.11 ESOP . . . . . . . . . . . . . . . . . . 3
2.12 Non-Pension Benefit. . . . . . . . . . . 3
2.13 Participant. . . . . . . . . . . . . . . 3
2.14 Pension Benefit. . . . . . . . . . . . . 3
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<PAGE>
2.15 Pension Plan . . . . . . . . . . . . . . 3
2.16 Plan . . . . . . . . . . . . . . . . . . 3
2.17 Plan Year. . . . . . . . . . . . . . . . 3
2.18 Savings Plan. . . . . . . . . . . . . . 3
ARTICLE III - ADMINISTRATION OF PLAN . . . . . . . . . . . . . . . 4
3.1 Administrator. . . . . . . . . . . . . . 4
3.2 Powers . . . . . . . . . . . . . . . . . 4
3.3 Duties of the Board of
Directors. . . . . . . . . . . . . . . 4
3.4 Indemnification. . . . . . . . . . . . . 6
ARTICLE IV - ELIGIBILITY . . . . . . . . . . . . . . . . . . . . . 6
4.1 Eligibility Requirements . . . . . . . . 6
4.2 Determination of Eligibility . . . . . . 7
ARTICLE V - BENEFITS . . . . . . . . . . . . . . . . . . . . . . . 8
5.1 Pension Benefit. . . . . . . . . . . . . 8
5.2 Non-Pension Benefit. . . . . . . . . . . 9
5.3 Distribution of Benefits . . . . . . . . 12
5.4 Funding of Benefits. . . . . . . . . . . 15
5.5 Withholding. . . . . . . . . . . . . . . 15
-ii-
<PAGE>
ARTICLE VI - MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . 16
6.1 Assignment . . . . . . . . . . . . . . . 16
6.2 Amendment and Termination. . . . . . . . 16
6.3 No Guarantee of Employment . . . . . . . 16
6.4 Construction . . . . . . . . . . . . . . 17
-iii-
<PAGE>
SUPPLEMENTAL BENEFIT PLAN
FOR
GULF POWER COMPANY
ARTICLE I - PURPOSE AND ADOPTION OF PLAN
1.1 Adoption: Gulf Power Company hereby adopts and establishes the
Supplemental Benefit Plan for Gulf Power Company. The Plan shall be an unfunded
deferred compensation arrangement whose benefits shall be paid solely from the
general assets of the Company.
1.2 Purpose: The Plan is designed to provide certain retirement and
other deferred compensation benefits primarily for a select group of management
or highly compensated employees which are not otherwise payable or cannot
otherwise be provided by the Company (1) under the Pension Plan for Employees of
Gulf Power Company, The Southern Company Employee Savings Plan, and The Southern
Company Employee Stock Ownership Plan, as a result of the limitations set forth
under Sections 401(a)(17), 401(k), 401(m), 402(g), or 415 of the Internal
Revenue Code of 1986, as amended from time to time and (2) to compensate for
lost benefits resulting from participation in The Southern Company Deferred
Compensation Plan, as amended from time to time.
ARTICLE II DEFINITIONS
2.1 "Account" shall mean the account or accounts established and
maintained by the Company to reflect the interest of a Participant in the Plan
resulting from a Participant's Non-Pension Benefit calculated in accordance with
Section 5.2.
<PAGE>
2.2 "Affiliated Employer" shall mean any corporation which is a member
of the controlled group of corporations of which The Southern Company is the
common parent corporation.
2.3 "Beneficiary" shall mean any person, estate, trust, or organization
entitled to receive any payment under the Plan upon the death of a Participant.
2.4 "Board of Directors" shall mean the Board of Directors
of the Company.
2.5 "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
2.6 "Common Stock" shall mean common stock of The Southern
Company.
2.7 "Company" shall mean Gulf Power Company.
2.8 "Deferred Compensation Plan" shall mean The Southern
Company Deferred Compensation Plan, as amended from time to time, following its
adoption by the Board of Directors.
2.9 "Effective Date" shall mean January 1, 1983. The Effective Date of
this amendment and restatement shall mean January 1, 1996.
2.10 "Employee" shall mean any person who is currently
employed by the Company.
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<PAGE>
2.11 "ESOP" shall mean The Southern Company Employee Stock Ownership
Plan, as amended from time to time.
2.12 "Non-Pension Benefit" shall mean the benefit described
in Section 5.2.
2.13 "Participant" shall mean an Employee or former Employee of the
Company who is eligible pursuant to Sections 4.1 and 4.2.
2.14 "Pension Benefit" shall mean the benefit described in
Section 5.1.
2.15 "Pension Plan" shall mean the defined benefit pension plan
maintained by the Company or an Affiliated Employer, as amended from time to
time.
2.16 "Plan" shall mean the Supplemental Benefit Plan for Gulf Power
Company, as amended from time to time.
2.17 "Plan Year" shall mean the calendar year.
2.18 "Savings Plan" shall mean The Southern Company Employee Savings
Plan, as amended from time to time.
Where the context requires, the definitions of all terms set forth in
the Pension Plan, the ESOP, the Savings Plan and the Deferred Compensation Plan
shall apply with equal force and effect for purposes of interpretation and
administration of the Plan, unless said terms are otherwise specifically defined
in the Plan. The masculine pronoun shall be construed to include the feminine
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<PAGE>
pronoun and the singular shall include the plural, where the
context so requires.
ARTICLE III ADMINISTRATION OF PLAN
3.1 Administrator. The general administration of the Plan
shall be placed in the Board of Directors.
3.2 Powers. The Board of Directors shall administer the Plan in
accordance with its terms and shall have all powers necessary to carry out the
provisions of the Plan more particularly set forth herein. It shall interpret
the Plan and shall determine all questions arising in the administration,
interpretation and application of the Plan. Any such determination by it shall
be conclusive and binding on all persons. It may adopt such regulations as it
deems desirable for the conduct of its affairs. It may appoint such accountants,
counsel, actuaries, specialists and other persons as it deems necessary or
desirable in connection with the administration of this Plan, and shall be the
agent for the service of process.
3.3 Duties of the Board of Directors.
(a) The Board of Directors is responsible for the daily
administration of the Plan. It may appoint other persons or
entities to perform any of its fiduciary functions. The Board of
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<PAGE>
Directors and any such appointee may employ advisors and other persons necessary
or convenient to help it carry out its duties, including its fiduciary duties.
The Board of Directors shall have the right to remove any such appointee from
his position. Any person, group of persons or entity may serve in more than one
fiduciary capacity.
(b) The Board of Directors shall maintain accurate and
detailed records and accounts of Participants and of their rights under the Plan
and of all receipts, disbursements, transfers and other transactions concerning
the Plan. Such accounts, books and records relating thereto shall be open at all
reasonable times to inspection and audit by persons designated by the Board of
Directors.
(c) The Board of Directors shall take all steps necessary to
ensure that the Plan complies with the law at all times. These steps shall
include such items as the preparation and filing of all documents and forms
required by any governmental agency; maintaining of adequate Participants'
records; recording and transmission of all notices required to be given to
Participants and their Beneficiaries; the receipt and dissemination, if
required, of all reports and information received from an Affiliated Employer;
securing of such fidelity bonds as may
-5-
<PAGE>
be required by law; and doing such other acts necessary for the proper
administration of the Plan. The Board of Directors shall keep a record of all of
its proceedings and acts, and shall keep all such books of account, records and
other data as may be necessary for proper administration of the Plan.
3.4 Indemnification. The Company shall indemnify the Board of Directors
against any and all claims, losses, damages, expenses and liability arising from
an action or failure to act, except when the same is finally judicially
determined to be due to gross negligence or willful misconduct. The Company may
purchase at its own expense sufficient liability insurance for the Board of
Directors to cover any and all claims, losses, damages and expenses arising from
any action or failure to act in connection with the execution of the duties as
Board of Directors. No member of the Board of Directors who is also an Employee
of the Company shall receive any compensation from the Plan for his services in
administering the Plan.
ARTICLE IV ELIGIBILITY
4.1 Eligibility Requirements. All Employees (a) who are
determined eligible to participate in accordance with Section 4.2,
(b) whose benefits under the Pension Plan of the Company are
-6-
<PAGE>
limited by the limitations set forth in Sections 401(a)(17) or 415 of the Code,
(c) for whom contributions by the Company to the Savings Plan are limited by the
limitations set forth in Sections 401(a)(17), 401(k), 401(m), 402(g) or 415 of
the Code, (d) for whom contributions by the Company to the ESOP are limited by
the limitations set forth in Sections 401(a)(17) or 415 of the Code or (e) who
after December 31, 1995, make deferrals under the Deferred Compensation Plan,
shall be eligible to receive benefits under the Plan.
4.2 Determination of Eligibility. The Board of Directors shall
determine which Employees are eligible to participate. Upon becoming a
Participant, an Employee shall be deemed to have assented to the Plan and to any
amendments hereafter adopted. The Board of Directors shall be authorized to
rescind the eligibility of any Participant if necessary to insure that the Plan
is maintained primarily for the purpose of providing deferred compensation to a
select group of management or highly compensated employees under the Employee
Retirement Income Security Act of 1974, as amended.
-7-
<PAGE>
ARTICLE V BENEFITS
5.1 Pension Benefit.
(a) If a Participant has Accredited Service with respect to
the Pension Plan of the Company, but not with respect to the Pension Plan of any
Affiliated Employer, he shall be entitled to a Pension Benefit equal to that
portion of his Retirement Income under the Pension Plan of the Company which is
not payable under such Pension Plan as a result of the limitations imposed by
Sections 401(a)(17), 415(b), or 415(e) of the Code.
(b) If a Participant has Accredited Service with respect to
the Pension Plan of the Company and with respect to the Pension Plan of one or
more Affiliated Employers, his Pension Benefit payable by the Company, and any
Affiliated Employer(s) shall be equal to that portion of his combined Retirement
Income under each Pension Plan which is not payable under any of such Pension
Plans as a result of the limitations described by Sections 401(a)(17), 415(b),
or 415(e) of the Code, multiplied by a fraction, the sum of the individual
fractions not to exceed one (1), the numerator of which is his years of
Accredited Service under the Pension Plan of the Company or any Affiliated
Employer(s) and the denominator which is his total years of Accredited Service
-8-
<PAGE>
under the Pension Plans of the Company and any Affiliated
Employer(s).
(c) For purposes of this Section 5.1, the Pension Benefit of
a Participant shall be calculated based on the Participant's Earnings that are
considered under the Pension Plan of the Company in calculating his Retirement
Income, without regard to the limitation of Section 401(a)(17) of the Code,
including any portion of his compensation he may have elected to defer under the
Deferred Compensation Plan but excluding Incentive Pay he deferred under such
Deferred Compensation Plan.
(d) To the extent that a Participant's Retirement Income
under a Pension Plan is recalculated as a result of an amendment to such Pension
Plan in order to increase the amount of his Retirement Income, the Participant's
Pension Benefit shall also be recalculated in order to properly reflect such
increase in determining payments of the Participant's Pension Benefit made on or
after the effective date of such increase.
5.2 Non-Pension Benefit.
(a) A Participant shall be entitled to a Non-Pension
Benefit which is determined under this Section 5.2. An Account
shall be established for the Participant by the Company, as of his
initial Plan Year of participation in the Plan. Each Plan Year
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<PAGE>
such Account shall be credited with an amount equal to the amount that the
Company is prohibited from contributing (1) to the Savings Plan on behalf of the
Participant as a result of the limitations imposed by Sections 401(a)(17),
401(k), 401(m), 402(g), 415(c), or 415(e) of the Code and (2) to the ESOP on
behalf of the Participant as a result of the limitations imposed by Sections
401(a)(17), 415(c), or 415(e) of the Code.
(b) For purposes of this Section 5.2, the Non-Pension
Benefit of a Participant shall be calculated based on the Participant's
compensation that would have been considered in calculating allocations to his
accounts under the Savings Plan and ESOP, without regard to the limitations of
Section 401(a)(17) or Section 402(g) of the Code, including any portion of his
compensation he may have elected to defer under the Deferred Compensation Plan
but excluding Incentive Pay he deferred under the Deferred Compensation Plan.
(c) All amounts so credited to the Account of the
Participant shall be deemed to be invested in the Common Stock at the same time
that such amounts would have been so invested if they had been contributed by
the Company to the Savings Plan or the ESOP, as the case may be. In addition,
such Account shall be
-10-
<PAGE>
credited with respect to shares of Common Stock allocated to the Participant's
Account as follows:
(1) In the case of cash dividends, such additional
shares as could be purchased with the dividends which would have been
payable if the credited shares had been outstanding;
(2) In the case of dividends payable in property
other than cash or Common Stock, such additional shares as could be
purchased with the fair market value of the property which would have
been payable if the credited shares had been outstanding; or
(3) In the case of dividends payable in Common
Stock, such additional shares as would have been payable on the
credited shares if they had been outstanding.
(d) As soon as practicable following the first day of his
eligibility to have benefits credited to his Account, a Participant shall
designate in writing on a form to be prescribed by the Company the method of
payment of his Account, which shall be the payment of a single lump sum or a
series of annual installments not to exceed twenty (20). The method of
distribution initially designated by a Participant shall not be revoked and
shall govern the distribution of each Account established for the benefit of the
Participant by the Company. Notwithstanding, in the sole
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<PAGE>
discretion of the Board of Directors upon application by the Participant, the
method of distribution designated by such Participant may be modified not prior
to 395 days nor later than 365 days prior to a Participant's date of separation
from service in order to change the form of distribution of his Account in
accordance with the terms of the Plan. Each Participant, his Beneficiary, and
legal representative shall be bound as to any action taken pursuant to the
method of distribution elected by a Participant and the terms of the Plan.
5.3 Distribution of Benefits.
(a) The Pension Benefit, as determined in accordance with
Section 5.1, shall be payable in monthly increments on the first day of the
month concurrently with and in the same manner as the Participant's Retirement
Income under the Pension Plan. The Beneficiary of a Participant's Pension
Benefit shall be the same as the beneficiary of the Participant's Retirement
Income under the Pension Plan.
(b) When a Participant terminates his employment with the
Company, said Participant shall be entitled to receive the market value of any
shares of Common Stock (and fractions thereof) reflected in any Account
maintained by the Company for his benefit under the Plan in a single lump sum
distribution or annual
-12-
<PAGE>
installments not to exceed twenty (20). Such distribution shall be made not
later than sixty (60) days following the close of the calendar quarter in which
his termination of employment occurs, or as soon as reasonably practicable
thereafter. The transfer by a Participant between companies within The Southern
Company shall not be deemed to be a termination of employment with the Company.
No portion of a Participant's Account shall be distributed in Common Stock.
(c) In the event a Participant elects to receive the
distribution of his Account in annual installments, the first payment shall be
made not later than sixty (60) days following the close of the calendar quarter
in which his termination of employment occurs, or as soon as reasonably
practicable thereafter, and shall be an amount equal to the balance in the
Participant's Account divided by the number of annual installment payments. Each
subsequent annual payment shall be an amount equal to the balance in the
Participant's Account divided by the number of the remaining annual payments and
shall be due on the anniversary of the preceding payment date. No portion of a
Participant's Account shall be distributed in Common Stock.
(d) Upon the death of a Participant, or a former
Participant prior to the payment of all amounts credited to said
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<PAGE>
Participant's Account, the unpaid balance shall be paid in the sole discretion
of the Board of Directors (1) in a lump sum to the designated Beneficiary of a
Participant or former Participant within sixty (60) days following the close of
the calendar quarter in which the Board of Directors is provided evidence of the
Participant's death (or as soon as reasonably practicable thereafter) or (2) in
accordance with the distribution method chosen by such Participant or former
Participant. The Beneficiary designation may be changed by the Participant or
former Participant at any time without the consent of the prior Beneficiary. In
the event a Beneficiary designation is not on file or the designated Beneficiary
is deceased or cannot be located, payment will be made to the estate of the
Participant or former Participant. No portion of a Participant's Account shall
be distributed in Common Stock.
(e) Upon the total disability of a Participant or former
Participant, as determined by the Social Security Administration, the unpaid
balance of his Account shall be paid in the sole discretion of the Board of
Directors (1) in a lump sum to the Participant or former Participant, or his
legal representative within sixty (60) days following the notification of the
Board of Directors of the determination of disability by the Social Security
Administration (or as soon as reasonably practicable thereafter) or
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<PAGE>
(2) in accordance with the distribution method elected by such Participant or
former Participant. No portion of a Participant's Account shall be distributed
in Common Stock.
(f) The Board of Directors in its sole discretion upon
application made by the Participant, a designated Beneficiary, or their legal
representative, may determine to accelerate payments or, in the event of death
or total disability (as determined by Social Security Administration), to extend
or otherwise make payments in a manner different from the manner in which such
payment would be made under the method of distribution elected by the
Participant in the absence of such determination.
5.4 Funding of Benefits. The Company maintaining an Account for the
benefit of a Participant shall not reserve or otherwise set aside funds for the
payment of its obligations under the Plan, and such obligations shall be paid
solely from the general assets of the Company. Notwithstanding that a
Participant shall be entitled to receive the balance of his Account under the
Plan, the assets from which such amount shall be paid at all times remain
subject to the claims of the creditors of the Company.
5.5 Withholding. There shall be deducted from the payment
of any Pension Benefit or Non-Pension Benefit due under the Plan
the amount of any tax required by any governmental authority to be
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<PAGE>
withheld and paid over by the Company to such governmental authority for the
account of the Participant or Beneficiary entitled to such payment.
ARTICLE VI MISCELLANEOUS
6.1 Assignment. Neither the Participant, his Beneficiary, nor his legal
representative shall have any rights to sell, assign, transfer or otherwise
convey the right to receive the payment of any Pension Benefit or Non-Pension
Benefit due hereunder, which payment and the right thereto are expressly
declared to be nonassignable and nontransferable. Any attempt to assign or
transfer the right to payment under the Plan shall be null and void and of no
effect.
6.2 Amendment and Termination. The Plan may be amended or terminated at
any time by the Board of Directors, provided that no amendment or termination
shall cause a forfeiture or reduction in any benefits accrued as of the date of
such amendment or termination.
6.3 No Guarantee of Employment. Participation hereunder
shall not be construed as creating any contract of employment
between the Company and a Participant, nor shall it limit the right
of the Company to suspend, terminate, alter, or modify, whether or
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<PAGE>
not for cause, the employment relationship between the Company and
a Participant.
6.4 Construction. This Plan shall be construed in accordance with and
governed by the laws of the State of Florida, to the extent such laws are not
otherwise superseded by the laws of the United States.
IN WITNESS WHEREOF, the Plan has been executed by duly authorized
officers of Gulf Power Company, pursuant to resolutions of the Board of
Directors of Gulf Power Company, this day of
, 1996.
GULF POWER COMPANY
(CORPORATE SEAL)
By:
Attest:
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<PAGE>
Exhibit 10(e)21
SUPPLEMENTAL BENEFIT PLAN
FOR
MISSISSIPPI POWER COMPANY
January 1, 1996
<PAGE>
SUPPLEMENTAL BENEFIT PLAN
FOR
MISSISSIPPI POWER COMPANY
Page
ARTICLE I - PURPOSE AND ADOPTION OF PLAN . . . . . . . . . . . . . 1
1.1 Adoption . . . . . . . . . . . . . . . . 1
1.2 Purpose. . . . . . . . . . . . . . . . . 1
ARTICLE II - DEFINITIONS . . . . . . . . . . . . . . . . . . . . . 1
2.1 Account. . . . . . . . . . . . . . . . . 1
2.2 Affiliated Employer. . . . . . . . . . . 2
2.3 Beneficiary. . . . . . . . . . . . . . . 2
2.4 Board of Directors . . . . . . . . . . . 2
2.5 Code . . . . . . . . . . . . . . . . . . 2
2.6 Common Stock . . . . . . . . . . . . . . 2
2.7 Company. . . . . . . . . . . . . . . . . 2
2.8 Deferred Compensation Plan . . . . . . . 2
2.9 Effective Date . . . . . . . . . . . . . 2
2.10 Employee . . . . . . . . . . . . . . . . 2
2.11 ESOP . . . . . . . . . . . . . . . . . . 3
2.12 Non-Pension Benefit. . . . . . . . . . . 3
2.13 Participant. . . . . . . . . . . . . . . 3
2.14 Pension Benefit. . . . . . . . . . . . . 3
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<PAGE>
2.15 Pension Plan . . . . . . . . . . . . . . 3
2.16 Plan . . . . . . . . . . . . . . . . . . 3
2.17 Plan Year. . . . . . . . . . . . . . . . 3
2.18 Savings Plan. . . . . . . . . . . . . . 3
ARTICLE III - ADMINISTRATION OF PLAN . . . . . . . . . . . . . . . 4
3.1 Administrator. . . . . . . . . . . . . . 4
3.2 Powers . . . . . . . . . . . . . . . . . 4
3.3 Duties of the Board of
Directors. . . . . . . . . . . . . . . 4
3.4 Indemnification. . . . . . . . . . . . . 6
ARTICLE IV - ELIGIBILITY . . . . . . . . . . . . . . . . . . . . . 6
4.1 Eligibility Requirements . . . . . . . . 6
4.2 Determination of Eligibility . . . . . . 7
ARTICLE V - BENEFITS . . . . . . . . . . . . . . . . . . . . . . . 8
5.1 Pension Benefit. . . . . . . . . . . . . 8
5.2 Non-Pension Benefit. . . . . . . . . . . 9
5.3 Distribution of Benefits . . . . . . . . 12
5.4 Funding of Benefits. . . . . . . . . . . 15
5.5 Withholding. . . . . . . . . . . . . . . 15
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<PAGE>
ARTICLE VI - MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . 16
6.1 Assignment . . . . . . . . . . . . . . . 16
6.2 Amendment and Termination. . . . . . . . 16
6.3 No Guarantee of Employment . . . . . . . 16
6.4 Construction . . . . . . . . . . . . . . 17
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<PAGE>
SUPPLEMENTAL BENEFIT PLAN
FOR
MISSISSIPPI POWER COMPANY
ARTICLE I - PURPOSE AND ADOPTION OF PLAN
1.1 Adoption: Mississippi Power Company hereby adopts and establishes
the Supplemental Benefit Plan for Mississippi Power Company. The Plan shall be
an unfunded deferred compensation arrangement whose benefits shall be paid
solely from the general assets of the Company.
1.2 Purpose: The Plan is designed to provide certain retirement and
other deferred compensation benefits primarily for a select group of management
or highly compensated employees which are not otherwise payable or cannot
otherwise be provided by the Company (1) under the Pension Plan for Employees of
Mississippi Power Company, The Southern Company Employee Savings Plan, and The
Southern Company Employee Stock Ownership Plan, as a result of the limitations
set forth under Sections 401(a)(17), 402(g), 401(k), 401(m) or 415 of the
Internal Revenue Code of 1986, as amended from time to time and (2) to
compensate for lost benefits resulting from participation in The Southern
Company Deferred Compensation Plan, as amended from time to time.
ARTICLE II DEFINITIONS
2.1 "Account" shall mean the account or accounts established and
maintained by the Company to reflect the interest of a Participant in the Plan
resulting from a Participant's Non-Pension Benefit calculated in accordance with
Section 5.2.
<PAGE>
2.2 "Affiliated Employer" shall mean any corporation which is a member
of the controlled group of corporations of which The Southern Company is the
common parent corporation.
2.3 "Beneficiary" shall mean any person, estate, trust, or organization
entitled to receive any payment under the Plan upon the death of a Participant.
2.4 "Board of Directors" shall mean the Board of Directors
of the Company.
2.5 "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
2.6 "Common Stock" shall mean common stock of The Southern
Company.
2.7 "Company" shall mean Mississippi Power Company.
2.8 "Deferred Compensation Plan" shall mean The Southern
Company Deferred Compensation Plan, as amended from time to time, following its
adoption by the Board of Directors.
2.9 "Effective Date" shall mean January 1, 1983. The Effective Date of
this amendment and restatement shall mean January 1, 1996.
2.10 "Employee" shall mean any person who is currently
employed by the Company.
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<PAGE>
2.11 "ESOP" shall mean The Southern Company Employee Stock Ownership
Plan, as amended from time to time.
2.12 "Non-Pension Benefit" shall mean the benefit described
in Section 5.2.
2.13 "Participant" shall mean an Employee or former Employee of the
Company who is eligible pursuant to Sections 4.1 and 4.2.
2.14 "Pension Benefit" shall mean the benefit described in
Section 5.1.
2.15 "Pension Plan" shall mean the defined benefit pension plan
maintained by the Company or an Affiliated Employer, as amended from time to
time.
2.16 "Plan" shall mean the Supplemental Benefit Plan for Mississippi
Power Company, as amended from time to time.
2.17 "Plan Year" shall mean the calendar year.
2.18 "Savings Plan" shall mean The Southern Company Employee Savings
Plan, as amended from time to time.
Where the context requires, the definitions of all terms set forth in
the Pension Plan, the ESOP, the Savings Plan and the Deferred Compensation Plan
shall apply with equal force and effect for purposes of interpretation and
administration of the Plan, unless said terms are otherwise specifically defined
in the Plan. The masculine pronoun shall be construed to include the feminine
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<PAGE>
pronoun and the singular shall include the plural, where the
context so requires.
ARTICLE III ADMINISTRATION OF PLAN
3.1 Administrator. The general administration of the Plan
shall be placed in the Board of Directors.
3.2 Powers. The Board of Directors shall administer the Plan in
accordance with its terms and shall have all powers necessary to carry out the
provisions of the Plan more particularly set forth herein. It shall interpret
the Plan and shall determine all questions arising in the administration,
interpretation and application of the Plan. Any such determination by it shall
be conclusive and binding on all persons. It may adopt such regulations as it
deems desirable for the conduct of its affairs. It may appoint such accountants,
counsel, actuaries, specialists and other persons as it deems necessary or
desirable in connection with the administration of this Plan, and shall be the
agent for the service of process.
3.3 Duties of the Board of Directors.
(a) The Board of Directors is responsible for the daily
administration of the Plan. It may appoint other persons or
entities to perform any of its fiduciary functions. The Board of
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<PAGE>
Directors and any such appointee may employ advisors and other persons necessary
or convenient to help it carry out its duties, including its fiduciary duties.
The Board of Directors shall have the right to remove any such appointee from
his position. Any person, group of persons or entity may serve in more than one
fiduciary capacity.
(b) The Board of Directors shall maintain accurate and
detailed records and accounts of Participants and of their rights under the Plan
and of all receipts, disbursements, transfers and other transactions concerning
the Plan. Such accounts, books and records relating thereto shall be open at all
reasonable times to inspection and audit by persons designated by the Board of
Directors.
(c) The Board of Directors shall take all steps necessary to
ensure that the Plan complies with the law at all times. These steps shall
include such items as the preparation and filing of all documents and forms
required by any governmental agency; maintaining of adequate Participants'
records; recording and transmission of all notices required to be given to
Participants and their Beneficiaries; the receipt and dissemination, if
required, of all reports and information received from an Affiliated Employer;
securing of such fidelity bonds as may
-5-
<PAGE>
be required by law; and doing such other acts necessary for the proper
administration of the Plan. The Board of Directors shall keep a record of all of
its proceedings and acts, and shall keep all such books of account, records and
other data as may be necessary for proper administration of the Plan.
3.4 Indemnification. The Company shall indemnify the Board of Directors
against any and all claims, losses, damages, expenses and liability arising from
an action or failure to act, except when the same is finally judicially
determined to be due to gross negligence or willful misconduct. The Company may
purchase at its own expense sufficient liability insurance for the Board of
Directors to cover any and all claims, losses, damages and expenses arising from
any action or failure to act in connection with the execution of the duties as
Board of Directors. No member of the Board of Directors who is also an Employee
of the Company shall receive any compensation from the Plan for his services in
administering the Plan.
ARTICLE IV ELIGIBILITY
4.1 Eligibility Requirements. All Employees (a) who are
determined eligible to participate in accordance with Section 4.2,
(b) whose benefits under the Pension Plan of the Company are
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limited by the limitations set forth in Sections 401(a)(17) or 415 of the Code,
(c) for whom contributions by the Company to the Savings Plan are limited by the
limitations set forth in Sections 401(a)(17), 401(k), 401(m), 402(g) or 415 of
the Code, (d) for whom contributions by the Company to the ESOP are limited by
the limitations set forth in Sections 401(a)(17) or 415 of the Code or (e) who
after December 31, 1995, make deferrals under the Deferred Compensation Plan,
shall be eligible to receive benefits under the Plan.
4.2 Determination of Eligibility. The Board of Directors shall
determine which Employees are eligible to participate. Upon becoming a
Participant, an Employee shall be deemed to have assented to the Plan and to any
amendments hereafter adopted. The Board of Directors shall be authorized to
rescind the eligibility of any Participant if necessary to insure that the Plan
is maintained primarily for the purpose of providing deferred compensation to a
select group of management or highly compensated employees under the Employee
Retirement Income Security Act of 1974, as amended.
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ARTICLE V BENEFITS
5.1 Pension Benefit.
(a) If a Participant has Accredited Service with respect to
the Pension Plan of the Company, but not with respect to the Pension Plan of any
Affiliated Employer, he shall be entitled to a Pension Benefit equal to that
portion of his Retirement Income under the Pension Plan of the Company which is
not payable under such Pension Plan as a result of the limitations imposed by
Sections 401(a)(17), 415(b), or 415(e) of the Code.
(b) If a Participant has Accredited Service with respect to
the Pension Plan of the Company and with respect to the Pension Plan of one or
more Affiliated Employers, his Pension Benefit payable by the Company, and any
Affiliated Employer(s) shall be equal to that portion of his combined Retirement
Income under each Pension Plan which is not payable under any of such Pension
Plans as a result of the limitations described by Sections 401(a)(17), 415(b),
or 415(e) of the Code, multiplied by a fraction, the sum of the individual
fractions not to exceed one (1), the numerator of which is his years of
Accredited Service under the Pension Plan of the Company or any Affiliated
Employer(s) and the denominator which is his total years of Accredited Service
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<PAGE>
under the Pension Plans of the Company and any Affiliated
Employer(s).
(c) For purposes of this Section 5.1, the Pension Benefit of
a Participant shall be calculated based on the Participant's Earnings that are
considered under the Pension Plan of the Company in calculating his Retirement
Income, without regard to the limitation of Section 401(a)(17) of the Code,
including any portion of his compensation he may have elected to defer under the
Deferred Compensation Plan but excluding Incentive Pay he deferred under such
Deferred Compensation Plan.
(d) To the extent that a Participant's Retirement Income
under a Pension Plan is recalculated as a result of an amendment to such Pension
Plan in order to increase the amount of his Retirement Income, the Participant's
Pension Benefit shall also be recalculated in order to properly reflect such
increase in determining payments of the Participant's Pension Benefit made on or
after the effective date of such increase.
5.2 Non-Pension Benefit.
(a) A Participant shall be entitled to a Non-Pension
Benefit which is determined under this Section 5.2. An Account
shall be established for the Participant by the Company, as of his
initial Plan Year of participation in the Plan. Each Plan Year
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such Account shall be credited with an amount equal to the amount that the
Company is prohibited from contributing (1) to the Savings Plan on behalf of the
Participant as a result of the limitations imposed by Sections 401(a)(17),
401(k), 401(m), 402(g), 415(c), or 415(e) of the Code and (2) to the ESOP on
behalf of the Participant as a result of the limitations imposed by Sections
401(a)(17), 415(c), or 415(e) of the Code.
(b) For purposes of this Section 5.2, the Non-Pension
Benefit of a Participant shall be calculated based on the Participant's
compensation that would have been considered in calculating allocations to his
accounts under the Savings Plan and ESOP, without regard to the limitations of
Section 401(a)(17) or Section 402(g) of the Code, including any portion of his
compensation he may have elected to defer under the Deferred Compensation Plan
but excluding Incentive Pay he deferred under the Deferred Compensation Plan.
(c) All amounts so credited to the Account of the
Participant shall be deemed to be invested in the Common Stock at the same time
that such amounts would have been so invested if they had been contributed by
the Company to the Savings Plan or the ESOP, as the case may be. In addition,
such Account shall be
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credited with respect to shares of Common Stock allocated to the Participant's
Account as follows:
(1) In the case of cash dividends, such additional
shares as could be purchased with the dividends which would have been
payable if the credited shares had been outstanding;
(2) In the case of dividends payable in property
other than cash or Common Stock, such additional shares as could be
purchased with the fair market value of the property which would have
been payable if the credited shares had been outstanding; or
(3) In the case of dividends payable in Common
Stock, such additional shares as would have been payable on the
credited shares if they had been outstanding.
(d) As soon as practicable following the first day of his
eligibility to have benefits credited to his Account, a Participant shall
designate in writing on a form to be prescribed by the Company the method of
payment of his Account, which shall be the payment of a single lump sum or a
series of annual installments not to exceed twenty (20). The method of
distribution initially designated by a Participant shall not be revoked and
shall govern the distribution of each Account established for the benefit of the
Participant by the Company. Notwithstanding, in the sole
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discretion of the Board of Directors upon application by the Participant, the
method of distribution designated by such Participant may be modified not prior
to 395 days nor later than 365 days prior to a Participant's date of separation
from service in order to change the form of distribution of his Account in
accordance with the terms of the Plan. Each Participant, his Beneficiary, and
legal representative shall be bound as to any action taken pursuant to the
method of distribution elected by a Participant and the terms of the Plan.
5.3 Distribution of Benefits.
(a) The Pension Benefit, as determined in accordance with
Section 5.1, shall be payable in monthly increments on the first day of the
month concurrently with and in the same manner as the Participant's Retirement
Income under the Pension Plan. The Beneficiary of a Participant's Pension
Benefit shall be the same as the beneficiary of the Participant's Retirement
Income under the Pension Plan.
(b) When a Participant terminates his employment with the
Company, said Participant shall be entitled to receive the market value of any
shares of Common Stock (and fractions thereof) reflected in any Account
maintained by the Company for his benefit under the Plan in a single lump sum
distribution or annual
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<PAGE>
installments not to exceed twenty (20). Such distribution shall be made not
later than sixty (60) days following the close of the calendar quarter in which
his termination of employment occurs, or as soon as reasonably practicable
thereafter. The transfer by a Participant between companies within The Southern
Company shall not be deemed to be a termination of employment with the Company.
No portion of a Participant's Account shall be distributed in Common Stock.
(c) In the event a Participant elects to receive the
distribution of his Account in annual installments, the first payment shall be
made not later than sixty (60) days following the close of the calendar quarter
in which his termination of employment occurs, or as soon as reasonably
practicable thereafter, and shall be an amount equal to the balance in the
Participant's Account divided by the number of annual installment payments. Each
subsequent annual payment shall be an amount equal to the balance in the
Participant's Account divided by the number of the remaining annual payments and
shall be due on the anniversary of the preceding payment date. No portion of a
Participant's Account shall be distributed in Common Stock.
(d) Upon the death of a Participant, or a former
Participant prior to the payment of all amounts credited to said
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<PAGE>
Participant's Account, the unpaid balance shall be paid in the sole discretion
of the Board of Directors (1) in a lump sum to the designated Beneficiary of a
Participant or former Participant within sixty (60) days following the close of
the calendar quarter in which the Board of Directors is provided evidence of the
Participant's death (or as soon as reasonably practicable thereafter) or (2) in
accordance with the distribution method chosen by such Participant or former
Participant. The Beneficiary designation may be changed by the Participant or
former Participant at any time without the consent of the prior Beneficiary. In
the event a Beneficiary designation is not on file or the designated Beneficiary
is deceased or cannot be located, payment will be made to the estate of the
Participant or former Participant. No portion of a Participant's Account shall
be distributed in Common Stock.
(e) Upon the total disability of a Participant or former
Participant, as determined by the Social Security Administration, the unpaid
balance of his Account shall be paid in the sole discretion of the Board of
Directors (1) in a lump sum to the Participant or former Participant, or his
legal representative within sixty (60) days following the notification of the
Board of Directors of the determination of disability by the Social Security
Administration (or as soon as reasonably practicable thereafter) or
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<PAGE>
(2) in accordance with the distribution method elected by such Participant or
former Participant. No portion of a Participant's Account shall be distributed
in Common Stock.
(f) The Board of Directors in its sole discretion upon
application made by the Participant, a designated Beneficiary, or their legal
representative, may determine to accelerate payments or, in the event of death
or total disability (as determined by Social Security Administration), to extend
or otherwise make payments in a manner different from the manner in which such
payment would be made under the method of distribution elected by the
Participant in the absence of such determination.
5.4 Funding of Benefits. The Company maintaining an Account for the
benefit of a Participant shall not reserve or otherwise set aside funds for the
payment of its obligations under the Plan, and such obligations shall be paid
solely from the general assets of the Company. Notwithstanding that a
Participant shall be entitled to receive the balance of his Account under the
Plan, the assets from which such amount shall be paid at all times remain
subject to the claims of the creditors of the Company.
5.5 Withholding. There shall be deducted from the payment
of any Pension Benefit or Non-Pension Benefit due under the Plan
the amount of any tax required by any governmental authority to be
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withheld and paid over by the Company to such governmental authority for the
account of the Participant or Beneficiary entitled to such payment.
ARTICLE VI MISCELLANEOUS
6.1 Assignment. Neither the Participant, his Beneficiary, nor his legal
representative shall have any rights to sell, assign, transfer or otherwise
convey the right to receive the payment of any Pension Benefit or Non-Pension
Benefit due hereunder, which payment and the right thereto are expressly
declared to be nonassignable and nontransferable. Any attempt to assign or
transfer the right to payment under the Plan shall be null and void and of no
effect.
6.2 Amendment and Termination. The Plan may be amended or terminated at
any time by the Board of Directors, provided that no amendment or termination
shall cause a forfeiture or reduction in any benefits accrued as of the date of
such amendment or termination.
6.3 No Guarantee of Employment. Participation hereunder
shall not be construed as creating any contract of employment
between the Company and a Participant, nor shall it limit the right
of the Company to suspend, terminate, alter, or modify, whether or
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not for cause, the employment relationship between the Company and
a Participant.
6.4 Construction. This Plan shall be construed in accordance with and
governed by the laws of the State of Mississippi, to the extent such laws are
not otherwise superseded by the laws of the United States.
IN WITNESS WHEREOF, the Plan has been executed by duly authorized
officers of Mississippi Power Company, pursuant to resolutions of the Board of
Directors of Mississippi Power Company, this day of , 1996.
MISSISSIPPI POWER COMPANY
(CORPORATE SEAL)
By:
Attest:
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Exhibit 10(f)16
FIRST AMENDMENT TO THE EMPLOYEES' RETIREMENT
PLAN OF SAVANNAH ELECTRIC AND POWER COMPANY
(AS AMENDED AND RESTATED EFFECTIVE
JANUARY 1, 1989)
WHEREAS, the Board of Directors of Savannah Electric and Power Company
(the "Company") heretofore adopted the amendment and restatement of the
Employees' Retirement Plan of Savannah Electric and Power Company (the "Plan"),
effective January 1, 1989, in order to comply with the Internal Revenue Code of
1986, as amended; and
WHEREAS, the Company has authorized appropriate officers to take proper
actions which accomplish its overall intent to amend and restate the Plan; and
WHEREAS, the Company is authorized pursuant to Article XIII of the Plan
to amend the Plan from time to time.
NOW, THEREFORE, effective January 16, 1995, the Company hereby amends
the Plan as follows:
1.
Section 5.05(a) of the Plan is amended by deleting said Section in its
entirety and substituting the following in lieu thereof:
5.05 Restoration of Retired Member or Former Member to Service
(a) If a Member in receipt of an Allowance is
restored to service as an Employee on or
after his Normal Retirement Date, the
following shall apply, except with respect
to temporary employees on and after January
16, 1995:
(i) His Allowance shall be suspended for each
month during the period of restoration which
is a Suspendible Month.
(ii) Upon the death of the Member during the
period of restoration, any Allowance that
would have been payable to his surviving
Spouse had he not been restored to service
shall be payable or, alternatively, any
payments under an optional benefit, if one
has been elected and becomes effective,
shall begin.
<PAGE>
(iii) Upon later retirement, payment of the
Member's Allowance shall resume no later
than the third month after the latest
Suspendible Month during the period of
restoration, and shall be adjusted, if
necessary, in compliance with Title 29 of
the Code of Federal Regulations,
ss. 2530.203-3 in a consistent and
nondiscriminatory manner.
2.
Section 5.05(b) of the Plan is amended by deleting said Section in its
entirety and substituting the following in lieu thereof:
(b) If a Member in receipt of an Allowance is
restored to service as an Employee before
his Normal Retirement Date, the following
shall apply, except with respect to
temporary employees on and after January 16,
1995:
(i) His Allowance shall cease and any election
of an optional benefit in effect shall be void.
(ii) Any Continuous and Credited
Service to which he was
entitled when he retired or
terminated service shall be
restored to him.
(iii) Upon later retirement or termination, his
Allowance shall be based on the benefit
formula then in effect and his Compensation
and Credited Service before and after the
period when he was not in the service of the
Company, reduced by an amount of
Equivalent Actuarial Value to the benefits,
if any, he received before the date of his
restoration to service.
(iv) The part of the Member's Allowance upon
later retirement payable with respect to
Credited Service rendered before his
previous retirement or termination of service
shall never be less than the amount of his
previous Allowance modified to reflect any
option in effect on his later retirement.
2
<PAGE>
3.
Except as amended herein by this First Amendment, the Plan shall remain
in full force and effect as amended and restated by the Company prior to the
adoption of this First Amendment.
IN WITNESS WHEREOF, the Company, through its duly authorized officers,
adopts this First Amendment to the Plan this 16th day of January, 1995, to be
effective as stated herein.
SAVANNAH ELECTRIC AND POWER COMPANY
By:
Arthur M. Gignilliat, Jr.
President and Chief Executive Officer
ATTEST:
By:
Lavonne K. Calandra
Corporate Secretary
[CORPORATE SEAL]
3
Exhibit 10(f)17
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
OF
SAVANNAH ELECTRIC AND POWER COMPANY
Amended and Restated Effective January 1, 1996
<PAGE>
TABLE OF CONTENTS
ARTICLE I - ADOPTION AND PURPOSE 1
ARTICLE II - DEFINITIONS 2
2.1 Accrued SERP Retirement Benefit.................................. 2
2.2 Assumed Pension Plan Retirement Benefit.......................... 2
2.3 Committee........................................................ 2
2.4 Company.......................................................... 2
2.5 Credited Service................................................. 2
2.6 Designated Beneficiary........................................... 2
2.7 Disability Benefit............................................... 2
2.8 Disability Date.................................................. 3
2.9 Early Retirement Date............................................ 3
2.10 Early Retirement Factor.......................................... 3
2.11 Eligible Spouse.................................................. 3
2.12 Final Average Salary............................................. 3
2.13 Normal Retirement Date........................................... 3
2.14 Participant...................................................... 3
2.15 Pension Plan..................................................... 3
2.16 Pension Plan Spouse's Allowance.................................. 3
2.17 Plan............................................................. 4
2.18 Postponed Retirement Date........................................ 4
2.19 Salary........................................................... 4
2.20 SERP Death Benefit............................................... 4
2.21 SERP Disability Benefit.......................................... 4
2.22 SERP Retirement Benefit.......................................... 4
2.23 Severance Date................................................... 4
2.24 Social Security Amount........................................... 4
2.25 Total Disability and Totally Disabled............................ 4
2.26 Vested Percentage................................................ 5
ARTICLE III - ELIGIBILITY AND PARTICIPATION 6
3.1 Eligibility...................................................... 6
3.2 Participation.................................................... 6
ARTICLE IV - RETIREMENT BENEFITS 7
4.1 Normal Retirement................................................ 7
4.2 Early Retirement................................................. 7
4.3 Postponed Retirement............................................. 8
4.4 Commencement of Payment.......................................... 8
4.5 Re-employment of Retired Participant............................. 8
4.6 Transfers Between Companies...................................... 8
4.7 Effect of Other Arrangements on Plan Benefits.................... 9
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ARTICLE V - PRERETIREMENT DEATH BENEFITS 10
5.1 Death Benefit.................................................... 10
5.2 Payment.......................................................... 10
ARTICLE VI - DISABILITY BENEFITS 11
6.1 Disability Prior to Retirement Date.............................. 11
6.2 Benefit at Retirement Date....................................... 12
ARTICLE VII - SEVERANCE BENEFITS 13
7.1 Eligibility...................................................... 13
7.2 Participant Benefit.............................................. 13
7.3 Spousal Benefit.................................................. 13
7.4 Resumption of Employment After Severance......................... 14
ARTICLE VIII - ADMINISTRATIVE COMMITTEE 15
8.1 Authority........................................................ 15
8.2 Voting........................................................... 15
8.3 Records.......................................................... 15
8.4 Liability........................................................ 15
ARTICLE IX - AMENDMENT AND TERMINATION 16
ARTICLE X - MISCELLANEOUS 17
10.1 Non-Alienation of Benefits....................................... 17
10.2 No Trust Created 17
10.3 No Employment Agreement.......................................... 17
10.4 Binding Effect................................................... 17
10.5 Suicide.......................................................... 17
10.6 Claims for Benefits.............................................. 18
10.7 Entire Plan...................................................... 18
10.8 Merger or Consolidation.......................................... 18
10.9 Age Differential of Spouse....................................... 18
ARTICLE XI - CONSTRUCTION 19
11.1 Governing Law.................................................... 19
11.2 Gender........................................................... 19
11.3 Headings, etc.................................................... 19
11.4 Children......................................................... 19
11.5 Action........................................................... 19
ii
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ARTICLE I
ADOPTION AND PURPOSE
1.1 Adoption of Plan. The Company heretofore established and maintained
the Supplemental Executive Retirement Plan of Savannah Electric and Power
Company, effective as of January 1, 1984. The Plan was subsequently amended and
restated by the Company, effective as of January 1, 1987 and was again amended,
effective as of October 12, 1994. The Company hereby amends and restates the
Supplemental Executive Retirement Plan of Savannah Electric and Power Company,
as hereinafter stated, to be effective as of January 1, 1996.
1.2 Purpose. This Plan is designed and implemented for the purpose of
enhancing the earnings and growth of Savannah Electric and Power Company by
providing to the limited group of management employees largely responsible for
such earnings and long-term growth deferred compensation in the form of
supplemental retirement income benefits, thereby increasing the incentive of
such key management employees to make the Company more profitable. The benefits
are normally payable to Participants upon retirement, disability or death. The
terms of the benefits operate in conjunction with the Participant's benefits
payable under the Company's Employees' Retirement Plan of Savannah Electric and
Power Company and the Savannah Electric and Power Company Long Term Disability
Income Plan, and are designed to supplement such benefits and provide the
participant with additional financial security upon retirement, disability or
death.
<PAGE>
ARTICLE II
DEFINITIONS
Unless otherwise clearly required by the context, the terms used herein
shall have the following meanings:
2.1 "Accrued SERP Retirement Benefit" shall mean the amount determined
by multiplying the Participant's SERP Retirement Benefit times a fraction (not
exceeding 1.0), the numerator of which is the number of years and months of
Credited Service completed on the Participant's Early Retirement Date, Severance
Date or any other date, whichever is applicable, and the denominator of which
shall be the greater of (i) the number of years and months of Credited Service
which the Participant would have completed upon attainment of age 62 if he had
remained employed until such time or (ii) 15 years of Credited Service.
2.2 "Assumed Pension Plan Retirement Benefit" shall mean the actual
annual retirement benefit a Participant would receive pursuant to the Pension
Plan calculated with the following assumptions:
(a) A married Participant elects to receive his
retirement benefit on a life and seventy-five percent
(75%) joint survivor basis.
(b) A single Participant elects to receive his retirement
benefit on a life and ten-year certain basis.
2.3 "Committee" shall mean the Administrative Benefits Committee
appointed by the Board of Directors of the Company to administer the Plan.
2.4 "Company" shall mean Savannah Electric and Power Company and any
successor to Savannah Electric and Power Company by merger, purchase or
otherwise.
2.5 "Credited Service" shall have the same meaning as set forth in
Article 4, ss.ss. 4.02 and 4.05 of the Pension Plan.
2.6 "Designated Beneficiary" shall mean one or more beneficiaries, as
designated by a Participant in writing delivered to the Committee, to whom
certain pre-retirement death Benefit payments shall be made pursuant to the
provisions of Article V. In the event no such written designation is made by the
Participant or if such beneficiary shall not be living or in existence at the
time for commencement of payment, the Participant shall be deemed to have
designated his estate as such beneficiary.
2.7 "Disability Benefit" shall mean a totally disabled Participant's
actual annual disability benefit paid pursuant to the Savannah Electric and
Power Company Long Term Disability Income Plan.
2
<PAGE>
2.8 "Disability Date" shall have the same meaning as "Elimination
Period" as set forth in the Savannah Electric and Power Company Long Term
Disability Income Plan.
2.9 "Early Retirement Date" shall have the same meaning as set forth in
Article 5, ss. 5.02(a) of the Pension Plan.
2.10 "Early Retirement Factor" shall be a fraction not exceeding 1.0,
the numerator of which shall be the number of years and months of Credited
Service which the Participant would have completed at the commencement of
benefits from this Plan if he had remained employed until such time and the
denominator of which shall be the Participant's number of years and months of
Credited Service which he would have completed at attainment of age 62 if he had
remained employed until such age.
2.11 "Eligible Spouse" shall mean the spouse of a Participant who under
the laws of the state where the marriage was contracted, is deemed married to
that Participant on the date on which the payments from this Plan are to begin
to the Participant, except that for purposes of Article V, Eligible Spouse shall
mean a person who is married to a Participant for a period of at least twelve
months prior to his death.
2.12 "Final Average Salary" shall mean a Participant's average yearly
Salary during the 36 months of highest compensation within the 120 month period
immediately preceding the earliest to occur of the Participant's Severance Date,
Disability Date, date of death, Early Retirement Date, Normal Retirement Date,
or Postponed Retirement Date, whichever is applicable. In the event the
Participant does not have at least 36 months of regular employment with the
Company, Final Average Salary shall mean the average yearly Salary for the
Participant's total number of calendar months of employment; provided, however,
that if a Participant dies during Total Disability, Final Average Salary shall
be determined for the appropriate months immediately preceding the Participant's
Disability Date.
2.13 "Normal Retirement Date" shall mean the first day of the calendar
month following the birthday on which a Participant attains the age of 65.
2.14 "Participant" shall mean an employee of the Company who is
eligible and is participating in the Plan in accordance with Article III of this
Plan.
2.15 "Pension Plan" shall mean the Employees' Retirement Plan of
Savannah Electric and Power Company (amended and restated effective January 1,
1989), as it may from time to time be amended in the future.
2.16 "Pension Plan Spouse's Allowance" shall mean the pre-retirement
death benefit determined pursuant to Section 7.03 of the Pension Plan.
3
<PAGE>
2.17 "Plan" shall mean the Supplemental Executive Retirement Plan of
Savannah Electric and Power Company, as contained herein and as may be amended
from time to time hereafter.
2.18 "Postponed Retirement Date" shall mean the first day of the
calendar month on which a Participant actually retires after his Normal
Retirement Date.
2.19 "Salary" shall mean the annual compensation, excluding any long
term or short term incentive plan compensation, paid by the Company to a
Participant plus compensation, other than short term or long term incentive
amounts, deferred under any defined compensation plan or arrangement (including
without limitation, the Deferred Compensation Plan for Key Employees of Savannah
Electric and Power Company).
2.20 "SERP Death Benefit" shall mean an amount equal to fifty-two and
one-half percent (52 1/2%) of the Participant's Final Average Salary, reduced by
both of the following:
(a) the Participant's Pension Plan Pre-retirement Death
Benefit (Spouse's Benefit), if any; and
(b) fifty percent (50%) of the Participant's Social
Security Amount.
2.21 "SERP Disability Benefit" shall mean an amount equal to seventy
percent (70%) of the Participant's Final Average Salary, reduced by both of the
following:
(a) the Participant's Disability Benefit, if any; and
(b) the Participant's Social Security Amount.
2.22 "SERP Retirement Benefit" shall mean an amount equal to seventy
percent (70%) of the Participant's Final Average Salary, reduced by both of the
following:
(a) the Participant's Assumed Pension Plan Retirement
Benefit; and
(b) fifty percent (50%) of the Participant's Social
Security Amount.
2.23 "Severance Date" shall mean the date a Participant leaves the
employ of the Company other than for retirement, Total Disability or death.
2.24 "Social Security Amount" shall have the same meaning as set forth
in Section 1.29 of the Pension Plan.
2.25 "Total Disability and Totally Disabled" shall have the same
meaning as set forth in the Savannah Electric and Power Company Long Term
Disability Income Plan.
4
<PAGE>
2.26 "Vested Percentage" shall mean a Participant's vested percentage
in his benefits under the Plan as determined in accordance with the following
schedule:
Years of Credited
Service at Severance Date Vested Percentage
6 10%
7 20%
8 30%
9 40%
10 50%
11 60%
12 70%
13 80%
14 90%
15 or more 100%
Notwithstanding anything to the contrary above, the Vested Percentage of a
Participant who has attained age 60 shall be 100%.
5
<PAGE>
ARTICLE III
ELIGIBILITY AND PARTICIPATION
3.1 Eligibility. The Committee shall have the sole discretion to
determine the employees that are eligible to become Participants in accordance
with the purposes of the Plan.
3.2 Participation. The Committee shall notify those employees
selected as Participants of their participation and resulting
benefits.
6
<PAGE>
ARTICLE IV
RETIREMENT BENEFITS
4.1 Normal Retirement.
(a) Participant Benefit. Upon retirement at his Normal Retirement
Date, a Participant shall become entitled to receive an amount
equal to 1/12th of the Participant's SERP Retirement Benefit,
payable monthly during the Participant's lifetime.
(b) Spousal Benefit. Upon the death of a retired Participant who is
either receiving or entitled to receive a Normal Retirement Benefit in
accordance with Section 4.1(a), the surviving Eligible Spouse of such a
Participant, if any, shall become entitled to receive an amount equal to 75% of
the deceased Participant's Normal Retirement Benefit, payable monthly to the
Eligible Spouse during her lifetime.
4.2 Early Retirement.
(a) Participant Benefit. Upon retirement at his Early Retirement Date,
a Participant shall become entitled to receive an amount equal to 1/12th of the
Participant's Accrued SERP Retirement Benefit (as adjusted below, where
applicable), payable monthly during the Participant's lifetime. For purposes of
determining the Participant's Accrued SERP Retirement Benefit, 70% of Final
Average Salary shall be reduced by the Early Retirement Factor when the
Participant's retirement income under the Pension Plan commences prior to the
Participant's attainment of age 62. Notwithstanding anything to the contrary
above, a Participant who: (a) makes an election during the period from October
1, 1993 to November 15, 1993 to retire from the Company as of December 31, 1993;
(b) is eligible and elects to receive the benefits provided under Article 14 of
the Pension Plan by executing and allowing to become effective an Election Form
and Waiver Agreement; and (c) is eligible to retire and receive the early
retirement benefits offered under this Plan shall not have his Accrued SERP
Retirement Benefit reduced by the Early Retirement Factor, but shall instead be
entitled to an Early Retirement Benefit under the Plan equal to 1/12th of the
Participant's SERP Retirement Benefit payable monthly during the Participant's
lifetime.
(b) Spousal Benefit. Upon the death of a retired Participant who is
either receiving or entitled to receive an Early Retirement Benefit in
accordance with Section 4.2(a), the surviving Eligible Spouse of such
Participant, if any, shall become entitled to receive the benefit described in
Section 4.2(b)(1) or (b)(2) below, whichever is applicable:
(1) If the Participant was receiving his Early Retirement
Benefit at the time of his death, his surviving
Eligible Spouse, if any, shall receive a monthly
amount equal to 75% of the deceased Participant's
actual Early Retirement Benefit, payable monthly to
the Eligible Spouse during her lifetime.
7
<PAGE>
(2) If the Participant's death occurs prior to
commencement of payment of his Early Retirement
Benefit, his surviving Eligible Spouse, if any, shall
receive a monthly amount equal to 75 % of the
deceased Participant's Early Retirement Benefit
calculated as if payment of such Participant's Early
Retirement Benefit had commenced at his date of
death, payable monthly to the Eligible Spouse during
her lifetime.
4.3 Postponed Retirement.
(a) Participant Benefit. Upon retirement at a Postponed Retirement
Date, a Participant shall become entitled to receive an amount equal to 1/12th
of the Participant's SERP Retirement Benefit, payable monthly during the
Participant's lifetime.
(b) Spousal Benefit. Upon the death of a retired Participant who is
either receiving or entitled to receive a Postponed Retirement Benefit in
accordance with Section 4.3(a), the surviving Eligible Spouse of such a
Participant, if any, shall become entitled to receive an amount equal to 75% of
the deceased Participant's Postponed Retirement Benefit, payable monthly to the
Eligible Spouse during her lifetime.
4.4 Commencement of Payment. The payment of a Participant's benefits
under this Article IV shall commence at the same time as his retirement income
payments from the Pension Plan. All benefits payable to an Eligible Spouse under
this Article IV shall commence within 60 days of the Participant's death.
4.5 Re-employment of Retired Participant. A retired Participant
who is receiving or eligible to receive retirement benefits under this Article
IV who is re-employed by the Company shall not be eligible to resume
participation in the Plan.
4.6 Transfers Between Companies. Except as provided below, following a
transfer of employment, the transferred Participant shall not be entitled to or
accrue any benefits under the Plan except as provided in this Section 4.6. In
the event a Participant in the Plan is transferred to another subsidiary or
affiliate of The Southern Company prior to commencement of payment of his
benefits under the Plan, the benefits to be paid to such Participant under the
Plan shall be the amount determined by multiplying the amount determined in
accordance with Section 4.6(a) times the amount determined in accordance with
Section 4.6(b) below.
(a) Seventy percent (70%) of such Participant's Final Average
Salary reduced by both of the following:
(1) fifty percent (50%) of such Participant's Social
Security Amount.
(2) such Participant's Assumed Pension Plan Retirement
Benefit as of the effective date of such transfer of
employment.
8
<PAGE>
(b) The Participant's number of years and months of Credited
Service as of the effective date of such transfer plus one
year of Credited Service for each year of subsequent
employment at the other subsidiary or affiliate of The
Southern Company, divided by the number of years and months of
Credited Service which the Participant will have completed at
age 62 if he remains employed until such age.
For purposes of calculating any benefit paid a transferred Participant
pursuant to this Section 4.6 or any other Section of this Plan, the
Participant's Final Average Salary, Social Security Amount, Assumed Pension Plan
Retirement Benefit and any other such component of the benefit formula under
this Plan, except for Credited Service as set forth in Section 4.6(b) above,
shall be determined as of the Participant's date of transfer.
If the transferred Participant retires from another subsidiary or
affiliate of The Southern Company or the Company on a date other than his Normal
Retirement Date, dies, becomes disabled or otherwise ceases to be employed by
another subsidiary or affiliate of The Southern Company or the Company, such
Participant, or surviving spouse in the event of the death of the Participant,
shall receive the benefit available under this Plan due upon the occurrence of
such event as if the Participant continued to accrue service under this Section
4.6. Any such alterative benefit shall be subject to all applicable limitations,
adjustments and reductions described in this Plan that apply in the event that a
Participant retires on a date other than his Normal Retirement Date, dies,
becomes disabled or otherwise terminates employment with the Company, including
but not limited to those set forth in Sections 4.2, 4.3 and 4.6 hereof and
Articles V, VI and VII hereof.
4.7 Effect of Other Arrangements on Plan Benefits. In the event a
Participant in the Plan enters into a supplemental benefit arrangement with the
Company other than in accordance with this Plan, the benefits to be paid to such
Participant under this Plan shall be reduced by the benefits payable to such
Participant under the other supplemental benefit arrangement. The determination
as to whether there exists another supplemental benefit arrangement shall be
made by the Committee in its sole discretion.
9
<PAGE>
ARTICLE V
PRERETIREMENT DEATH BENEFITS
5.1 Death Benefit. Upon the death of a Participant while employed or
while receiving disability retirement benefits pursuant to Article 6.1 hereof,
prior to the earlier of either his Early Retirement Date or Normal Retirement
Date, a pre-retirement death benefit shall be payable if the deceased
Participant is survived by either an Eligible Spouse or children under age 21.
The death benefit described herein shall be an amount equal to 1/12th of the
Participant's SERP Death Benefit.
5.2 Payment.
(a) If the deceased Participant is survived by an Eligible Spouse, the
pre-retirement death benefit shall be paid monthly to such Eligible Spouse
during her lifetime. Notwithstanding the foregoing, if, upon the death of such
Eligible Spouse, there be then living any children of the Participant under age
21, the pre-retirement death benefit described in Section 5.1 shall be paid
monthly to the Participant's Designated Beneficiary until the last such
surviving child reaches age 21.
(b) If the deceased Participant is not survived by an Eligible Spouse
but is survived by children under age 21, the pre-retirement death benefit
described in Section 5. 1 shall be paid monthly to the Participant's Designated
Beneficiary until the last such surviving child reaches age 21.
10
<PAGE>
ARTICLE VI
DISABILITY BENEFITS
6.1 Disability Prior to Retirement Date.
(a) Benefit. In the event of the Total Disability of a Participant
prior to his Normal Retirement Date, the Participant shall become entitled to
receive a disability retirement benefit. Such disability retirement benefit
shall be determined as of the date of the Participant's Total Disability and
shall be equal to 1/12th of the Participant's SERP Disability Benefit.
(b) Payment. Such disability benefits shall be payable monthly to
the Totally Disabled Participant until the earliest of the following dates:
(i) he resumes working;
(ii) he refuses to submit to a medical examination or a
related series of examinations by a physician or
physicians acceptable to the Committee when such
examination or related series of examinations is
requested by the Committee (but not more often than
semi-annually), to determine whether he is eligible
for continuation of his disability retirement
benefit. These examinations requested by the
Committee shall be at the expense of the Company;
(iii) the Committee determines on the basis of a medical
examination herein authorized, or other evidence
obtained by said Committee that he has sufficiently
recovered to work;
(iv) he dies;
(v) he elects to retire at his Early Retirement Date; or
(vi) he reaches his Normal Retirement Date.
(c) Re-employment of Disabled Participant. A Totally Disabled
Participant who returns to regular active employment with the Company shall be
considered to have been on an authorized leave of absence during the period he
was disabled and, if he shall in due course become entitled to retirement
benefits hereunder, the period of his Total Disability shall be included in his
Credited Service and his Salary during such period of Total Disability shall be
considered to have been at the rate of his annual salary in effect during the
calendar year next preceding commencement of his Total Disability.
11
<PAGE>
6.2 Benefit at Retirement Date.
(a) Benefit. Upon reaching the earlier of his Early Retirement Date or
his Normal Retirement Date, a Participant receiving the disability retirement
benefit described in Section 6.1 above shall become entitled to disability
retirement benefits, in lieu of the retirement benefits of Article IV, as
described in this Section 6.2(a). Such benefits shall be calculated at either
the Participant's Early Retirement Date or Normal Retirement Date, as the case
may be, and shall be equal to either the Participant's Early Retirement Benefit
(and associated Eligible Spouse's benefit) or Normal Retirement Benefit (and
associated Eligible Spouse's benefit), as the case may be, as described in
Sections 4.1 and 4.2, as if such disabled Participant had actually retired upon
his Early Retirement Date or his Normal Retirement Date, with the prior period
of Total Disability being treated as Credited Service; provided, however, that
in determining such Early Retirement Benefit or Normal Retirement Benefit, as
the case may be, the Participant's Final Average Salary shall be calculated as
of his Total Disability Date.
(b) Payment. The disability retirement benefits described in
Section 6.2(a) above shall be payable in the same manner as the retirement
benefits described in Sections 4. 1 or 4.2, as the case may be, as if the
Participant had actually retired.
12
<PAGE>
ARTICLE VII
SEVERANCE BENEFITS
7.1 Eligibility. A Participant whose employment is terminated for
reasons other than death, Total Disability or retirement prior to completing
five (5) years of Credited Service shall not be entitled to receive any benefits
under this Plan. A Participant whose employment is transferred to another
subsidiary or affiliate of The Southern Company shall not be eligible to receive
benefits pursuant to Article VII, but shall instead be entitled to the benefits
described in Section 4.6 above.
7.2 Participant Benefit. A Participant whose employment is terminated
for reasons other than death, Total Disability or retirement after completing
five (5) years of Credited Service shall be entitled to receive a severance
benefit in an amount equal to 1/12th of the Participant's Vested Percentage of
his Accrued SERP Retirement Benefit calculated as of his Severance Date,
adjusted as follows: For purposes of determining the Participant's Accrued SERP
Retirement Benefit, 70% of Final Average Salary shall be reduced by the Early
Retirement Factor under the Pension Plan where the Participant's retirement
benefit commences prior to the Participant's attainment of age 62. A
Participant's Severance Benefit shall be paid monthly to him for his lifetime,
beginning at the same time when retirement income payments under the Pension
Plan commence.
7.3 Spousal Benefit. Upon the death of a Participant who i) has
attained age 55; ii) is either receiving or entitled to receive a severance
benefit in accordance with Section 7.2; and iii) is survived by an Eligible
Spouse, such Eligible Spouse shall become entitled to receive the benefit
described in Section 7.3(a) or (b) below, whichever is applicable:
(a) If the Participant was receiving his severance benefit at the
time of his death, the Eligible Spouse's benefit shall be an
amount equal to 75% of the deceased Participant's actual
severance benefit, payable monthly to the Eligible Spouse for
her lifetime.
(b) If the Participant's death occurs prior to commencement of
payment of his severance benefit, the Eligible Spouse's
benefit is a monthly amount equal to 75% of the deceased
Participant's severance benefit calculated as if payment of
such Participant's severance benefit had commenced at his date
of death, payable monthly to the Eligible Spouse during her
lifetime.
All benefit payments to an Eligible Spouse hereunder shall commence within 60
days of the Participant's death.
13
<PAGE>
7.4 Resumption of Employment After Severance. In the event a
Participant becomes entitled to a severance benefit but prior to commencement of
payment of such benefit such Participant is re-employed by the Company in a
capacity which entitles him to participate in this Plan, he shall forfeit such
severance benefit and shall again participate in the Plan as if his service with
the Company had never terminated; provided, however, that such Participant shall
not receive any Credited Service for the period of time between his termination
of employment and his re-employment. Notwithstanding anything to the contrary
above, if, at the time of the Participant's re-employment, payment of his
severance benefit has already commenced, such Participant shall not be eligible
to commence participation in this Plan and shall, therefore, have no right,
claim or entitlement to any benefits hereunder other than to payment of such
severance benefit.
14
<PAGE>
ARTICLE VIII
ADMINISTRATIVE COMMITTEE
8.1 Authority. This Plan shall be administered by an Administrative
Committee of not less than three (3) members appointed by the Board of Directors
of the Company. The Board of Directors may from time to time appoint members of
the Committee in substitution for the members previously appointed and may fill
vacancies, however caused. The Committee shall have all powers necessary to
enable it to carry out its duties in the administration of the Plan. Not in
limitation, but in application of the foregoing, the Committee shall have the
discretion, duty and power to determine all questions that may arise hereunder
as to the status and rights of participants in the Plan.
8.2 Voting. The Committee shall act by a majority of the number then
constituting the Committee, and such action may be taken either by a vote at a
meeting or in writing without a meeting.
8.3 Records. The Committee shall keep a complete record of all its
proceedings and all data relating to the administration of the Plan. The
Committee shall select one of its members as a Chairman. The Committee shall
appoint a Secretary to keep minutes of its meetings and the Secretary may or may
not be a member of the Committee. The Committee shall make such rules and
regulations for the conduct of its business as it shall deem advisable.
8.4 Liability. No member of the Committee shall be personally liable
for any actions taken by the Committee unless the member's action involves
willful misconduct.
15
<PAGE>
ARTICLE IX
AMENDMENT AND TERMINATION
9.1 Amendment and Termination. The Company reserves the right, at any
time or from time to time, by action of its Board of Directors, to modify or
amend in whole or in part any or all provisions of the Plan. In addition, the
Company reserves the right by action of its Board of Directors to terminate the
Plan in whole or in part; provided, however, that such termination shall not
affect any vested accrued benefits of participants hereunder.
16
<PAGE>
ARTICLE X
MISCELLANEOUS
10.1 Non-Alienation of Benefits. No right or benefit under the Plan
shall be subject to anticipation, alienation, sale, assignment, pledge,
encumbrance or charge, and any attempt to anticipate, alienate, sell, assign,
pledge, encumber or charge any right or benefit under the Plan shag be void. No
right or benefit hereunder shall in any manner be liable for or subject to the
debts, contracts, liabilities or torts of the person entitled to such benefits.
If the Participant, Eligible Spouse, or any other beneficiary hereunder shall
become bankrupt, or attempt to anticipate, alienate, sell, assign, pledge,
encumber, or charge any right hereunder, then such right or benefit shall, in
the discretion of the Committee, cease and terminate, and in such event, the
Committee may hold or apply the same or any part thereof for the benefit of the
Participant or his spouse, children or other dependents, or any of them, in such
manner and in such amounts and proportions as the Committee may deem proper.
10.2 No Trust Created. The obligations of the Company to make payments
hereunder shall constitute a liability of the Company to a Participant. Such
payments shall be made from the general funds of the Company, and the Company
shall not be required to establish or maintain any special or separate fund, or
purchase or acquire life insurance on a Participant's life, or otherwise to
segregate assets to assure that such payment shall be made, and neither a
Participant, Eligible Spouse, or any other beneficiary shall have any interest
in any particular asset of the Company by reason of its obligations hereunder.
Nothing contained in the Plan shall create or be construed as creating a trust
of any kind or any other fiduciary relationship between the Company and a
Participant or any other person.
10.3 No Employment Agreement. Neither the execution of this Plan nor
any action taken by the Company pursuant to this Plan shall be held or construed
to confer on a Participant any legal right to be continued as an Employee of the
Company in an executive position or in any other capacity whatsoever. This Plan
shall not be deemed to constitute a contract of employment between the Company
and a Participant, nor shall any provision herein restrict the right of any
Participant to terminate his employment with the Company.
10.4 Binding Effect. Obligations incurred by the Company pursuant
to this Plan shall be binding upon and inure to the benefit of the Company, its
successors and assigns, and the Participant, his Eligible Spouse or other
beneficiary.
10.5 Suicide. Except as hereinafter provided, no benefit shall be
payable under the Plan to a Participant, Eligible Spouse or other beneficiary
where such Participant dies as a result of suicide within two (2) years of his
commencement of participation herein.
17
<PAGE>
10.6 Claims for Benefits. Each Participant or beneficiary must claim
any benefit to which he is entitled under this Plan by a written notification to
the Committee. If a claim is denied, it must be denied within a reasonable
period of time, and be contained in a written notice stating the following:
(a) The specific reason for the denial;
(b) Specific reference to the Plan provision on which the denial
is based;
(c) Description of additional information necessary for the
claimant to present his claim, if any, and an explanation of
why such material is necessary.
(d) An explanation of the Plan's claims review procedure.
The claimant will have 60 days to request a review of the denial by the
Committee, which will provide a full and fair review. The request for review
must be in writing delivered to the Committee. The claimant may review pertinent
documents, and he may submit issues and comments in writing.
The decision by the Committee with respect to the review must be given
within 60 days after receipt of the request, unless special circumstances
require an extension (such as for a hearing). In no event shall the decision be
delayed beyond 120 days after receipt of the request for review. The decision
shall be written in a manner calculated to be understood by the claimant, and it
shall include specific reasons and refer to special Plan provisions as to its
effect.
10.7 Entire Plan. This document and any amendments contain all the
terms and provisions of the Plan and shall constitute the entire Plan, any other
alleged terms or provisions being of no effect.
10.8 Merger or Consolidation. In the event of a merger or a
consolidation by the Company with another corporation or the acquisition of
substantially all of the assets or outstanding stock of the Company by another
corporation, then and in such event the obligations and responsibilities of the
Company under this Plan shall be assumed by any such successor or acquiring
corporation, and all of the rights, privileges and benefits of the Participants
hereunder shall continue.
10.9 Age Differential of Spouse. If a Participant's Eligible Spouse at
the time of commencement of a 1) Normal Retirement Benefit; ii) Early Retirement
Benefit; iii) Postponed Retirement Benefit; iv) Pre-Retirement Death Benefit; or
v) Severance Benefit, is more than ten years younger than the Participant, the
monthly benefits payable hereunder shall be reduced actuarially using actuarial
assumptions under Section 5.6 of the Pension Plan and assuming that the Eligible
Spouse is ten years older than such spouse's attained age.
18
<PAGE>
ARTICLE XI
CONSTRUCTION
11.1 Governing Law. This Plan shall be construed and governed in
accordance with the laws of the State of Georgia.
11.2 Gender. The masculine gender, where appearing in the Plan, shall
be deemed to include the feminine gender, and the singular may include the
plural, unless the context clearly indicates to the contrary.
11.3 Headings, etc. The cover page of this Plan, the Table of Contents
and all headings used in this Plan are for convenience of reference only and are
not part of the substance of this Plan.
11.4 Children. All references in the Plan to a Participant's
children shall include both natural and adopted children.
11.5 Action. Any action under this Plan required or permitted by the
Company shall be by action of its Board of Directors or its duly authorized
designee.
19
<PAGE>
IN WITNESS WHEREOF, this Plan has been executed by duly authorized
officers of Savannah Electric and Power Company this ____ day of
________________________, ____ to be effective as of January 1, 1996.
SAVANNAH ELECTRIC AND POWER COMPANY
By:
President and Chief Executive Officer
ATTEST:
- - ---------------------------------------
Treasurer and Secretary
(Corporate Seal)
20
Exhibit 10(f)19
FIRST AMENDMENT TO THE DEFERRED
COMPENSATION PLAN FOR KEY EMPLOYEES OF
SAVANNAH ELECTRIC AND POWER COMPANY
WHEREAS, the Board of Directors of Savannah Electric and Power
Company (the "Company") heretofore adopted the Deferred Compensation Plan for
Key Employees of Savannah Electric and Power Company (the "Plan"), in order to
provide key management employees of the Company with long-term compensation
incentives; and
WHEREAS, the Plan has been amended from time to time to change
the terms of these long-term compensation incentives; and
WHEREAS, it is the Company's desire to amend the Plan at this
time to clarify administration of the Plan; and
WHEREAS, the Company has reserved the right to amend the Plan
at any time in Article XI of the Plan.
NOW, THEREFORE, effective October 12, 1994, the Company hereby
amends the Plan as follows:
1.
Section 2.2 of the Plan is amended by deleting such provision
in its entirety and inserting the following:
"Committee": The Administrative Benefits Committee appointed
by the Board of Directors of the Company to administer the
Plan.
IN WITNESS WHEREOF, the Board of Directors of Savannah
Electric and Power Company hereby approves this First Amendment to the Deferred
Compensation Plan for Key Employees of Savannah Electric and Power Company, as
executed by the undersigned authorized officer, and further authorizes such
other actions necessary to implement this Amendment this _____ day of
________________, 1994, to be effective as of October 12, 1994.
SAVANNAH ELECTRIC AND POWER COMPANY
By:
Arthur M. Gignilliat, Jr.
President and Chief Executive Officer
ATTEST:
Lavonne K. Calandra
Corporate Secretary
(CORPORATE SEAL)
Exhibit 24(a)
January 15, 1996
A. W. Dahlberg, W. L. Westbrook, Tommy Chisholm, and Wayne Boston
Dear Sirs:
The Southern Company proposes to file or join in the filing of
statements under the Securities Exchange Act of 1934, as amended, with the
Securities and Exchange Commission with respect to the following: (1) the filing
of this Company's Annual Report on Form 10-K for the year ended December 31,
1995, and (2) the filing of Quarterly Reports on Form 10-Q and Current Reports
on Form 8-K during 1996.
The Southern Company and the undersigned directors and officers of said
Company, individually as a director and/or as an officer of the Company, hereby
make, constitute and appoint each of you our true and lawful Attorney for each
of us and in each of our names, places and steads to sign and cause to be filed
with the Securities and Exchange Commission in connection with the foregoing
said Annual Report on Form 10-K and any appropriate amendment or amendments
thereto and any necessary exhibits, said Quarterly Reports on Form 10-Q and any
necessary exhibits and any Current Reports on Form 8-K and any necessary
exhibits.
Yours very truly,
THE SOUTHERN COMPANY
By /s/A. W. Dahlberg
A. W. Dahlberg
Chairman, President and
Chief Executive Officer
<PAGE>
- 2 -
/s/John C. Adams /s/William A. Parker, Jr.
John C. Adams William A. Parker, Jr.
/s/A. D. Correll /s/William J. Rushton, III
A. D. Correll William J. Rushton, III
/s/A. W. Dahlberg /s/Gloria M. Shatto
A. W. Dahlberg Gloria M. Shatto
/s/Paul J. DeNicola /s/Gerald J. St. Pe'
Paul J. DeNicola Gerald J. St. Pe'
/s/Jack Edwards /s/Herbert Stockham
Jack Edwards Herbert Stockham
/s/H. Allen Franklin /s/W. L. Westbrook
H. Allen Franklin W. L. Westbrook
/s/Bruce S. Gordon /s/Tommy Chisholm
Bruce S. Gordon Tommy Chisholm
/s/L. G. Hardman III /s/W. Dean Hudson
L. G. Hardman III W. Dean Hudson
/s/Elmer B. Harris
Elmer B. Harris
<PAGE>
Extract from minutes of meeting of the board of directors of The Southern
Company.
- - - - - - - - - -
RESOLVED: That for the purpose of signing the Company's Annual Report
on Form 10-K for the year ended December 31, 1995, and 1996 Form 10-Q's and
Form 8-K's and of remedying any deficiencies with respect thereto by
appropriate amendment or amendments, this Company, the members of its board
of directors, and its officers, are authorized to give their several powers
of attorney to A. W. Dahlberg, W. L. Westbrook, Tommy Chisholm, and Wayne
Boston.
- - - - - - - - - -
The undersigned officer of The Southern Company does hereby
certify that the foregoing is a true and correct copy of a resolution duly and
regularly adopted at a meeting of the board of directors of The Southern
Company, duly held on January 15, 1996, at which a quorum was in attendance and
voting throughout, and that said resolution has not since been rescinded but is
still in full force and effect.
Dated March 22, 1996 THE SOUTHERN COMPANY
By /s/Tommy Chisholm
Tommy Chisholm
Secretary
Exhibit 24(b)
February 23, 1996
W. L. Westbrook and Wayne Boston
64 Perimeter Center East
Atlanta, Georgia 30346
Dear Sirs:
Alabama Power Company proposes to file with the Securities and Exchange
Commission, under the Securities Exchange Act of 1934, (1) its Annual Report on
Form 10-K for the year ended December 31, 1995, and (2) its quarterly reports on
Form 10-Q during 1996.
Alabama Power Company and the undersigned directors and officers of
said Company, individually as a director and/or as an officer of the Company,
hereby make, constitute and appoint W. L. Westbrook and Wayne Boston our true
and lawful Attorneys for each of us and in each of our names, places and steads
to sign and cause to be filed with the Securities and Exchange Commission in
connection with the foregoing said Annual Report on Form 10-K, quarterly reports
on Form 10-Q, and any appropriate amendment or amendments thereto and any
necessary exhibits.
Yours very truly,
ALABAMA POWER COMPANY
By /s/Elmer B. Harris
Elmer B. Harris
President and Chief Executive
Officer
<PAGE>
- 2 -
/s/Whit Armstrong /s/Gerald H. Powell
Whit Armstrong Gerald H. Powell
/s/Philip E. Austin /s/Robert D. Powers
Philip E. Austin Robert D. Powers
/s/Margaret A. Carpenter /s/John W. Rouse
Margaret A. Carpenter John W. Rouse
/s/A. W. Dahlberg __________________________
A. W. Dahlberg William J. Rushton, III
/s/Peter V. Gregerson, Sr. /s/James H. Sanford
Peter V. Gregerson, Sr. James H. Sanford
/s/Bill M. Guthrie /s/John Cox Webb, IV
Bill M. Guthrie John Cox Webb, IV
/s/Elmer B. Harris /s/John W. Woods
Elmer B. Harris John W. Woods
/s/Carl E. Jones, Jr. /s/William B. Hutchins, III
Carl E. Jones, Jr. William B. Hutchins, III
/s/Wallace D. Malone, Jr. /s/Art P. Beattie
Wallace D. Malone, Jr. Art P. Beattie
/s/William V. Muse /s/David L. Whitson
William V. Muse David L. Whitson
/s/John T. Porter
John T. Porter
<PAGE>
Extract from minutes of meeting of the board of directors of Alabama Power
Company.
- - - - - - - - - -
RESOLVED: That for the purpose of signing and filing with the
Securities and Exchange Commission under the Securities Exchange Act of
1934, Alabama Power Company's annual report on Form 10-K for the year
ended December 31, 1995, and of remedying any deficiencies with respect
thereto by appropriate amendment or amendments, and also filing
quarterly reports on Form 10-Q, Alabama Power Company, the members of
its Board of Directors, and its officers are authorized to give their
several powers of attorney to W. L. Westbrook and Wayne Boston, in
substantially the form of power of attorney presented to this meeting.
- - - - - - - - - -
The undersigned officer of Alabama Power Company does hereby
certify that the foregoing is a true and correct copy of resolution duly and
regularly adopted at a meeting of the board of directors of Alabama Power
Company, duly held on February 23, 1996, at which a quorum was in attendance and
voting throughout, and that said resolution has not since been rescinded but is
still in full force and effect.
Dated March 22, 1996 ALABAMA POWER COMPANY
By /s/Wayne Boston
Wayne Boston
Assistant Secretary
Exhibit 24(c)
February 21, 1996
W. L. Westbrook and Wayne Boston
Dear Sirs:
Georgia Power Company proposes to file or join in the filing of
statements under the Securities Exchange Act of 1934 with the Securities and
Exchange Commission with respect to the following: (1) the filing of its Annual
Report on Form 10-K for the year ended December 31, 1995, and (2) the filing of
its quarterly reports on Form 10-Q during 1996.
Georgia Power Company and the undersigned directors and officers of
said Company, individually as a director and/or as an officer of the Company,
hereby make, constitute and appoint each of you our true and lawful Attorney for
each of us and in each of our names, places and steads to sign and cause to be
filed with the Securities and Exchange Commission in connection with the
foregoing said Annual Report on Form 10-K, quarterly reports on Form 10-Q and
any appropriate amendment or amendments thereto and any necessary exhibits.
Yours very truly,
GEORGIA POWER COMPANY
By /s/H. Allen Franklin
H. Allen Franklin
President and Chief Executive
Officer
<PAGE>
- 2 -
/s/Bennett A. Brown /s/G. Joseph Prendergast
Bennett A. Brown G. Joseph Prendergast
/s/A. W. Dahlberg /s/Herman J. Russell
A. W. Dahlberg Herman J. Russell
/s/William A. Fickling, Jr /s/Gloria M. Shatto
William A. Fickling, Jr Gloria M. Shatto
/s/H. Allen Franklin /s/William Jerry Vereen
H. Allen Franklin William Jerry Vereen
/s/L. G. Hardman III ______________________________
L. G. Hardman III Carl Ware
/s/Warren Y. Jobe /s/Thomas R. Williams
Warren Y. Jobe Thomas R. Williams
/s/James R. Lientz, Jr /s/Cliff S. Thrasher
James R. Lientz, Jr Cliff S. Thrasher
______________________________ /s/Judy M. Anderson
William A. Parker, Jr Judy M. Anderson
<PAGE>
Extract from minutes of meeting of the board of directors of Georgia Power
Company.
- - - - - - - - - -
RESOLVED: That for the purpose of signing reports under the Securities
Exchange Act of 1934 to be filed with the Securities and Exchange
Commission with respect to (a) the filing of the Company's Annual Report on
Form 10-K for the year ended December 31, 1995, and (b) quarterly filings
on Form 10-Q during 1996; and of remedying any deficiencies with respect
thereto by appropriate amendment or amendments, this Company and the
members of its Board of Directors authorize their several powers of
attorney to W. L. Westbrook and Wayne Boston.
- - - - - - - - - -
The undersigned officer of Georgia Power Company does hereby
certify that the foregoing is a true and correct copy of resolution duly and
regularly adopted at a meeting of the board of directors of Georgia Power
Company, duly held on February 21, 1996, at which a quorum was in attendance and
voting throughout, and that said resolution has not since been rescinded but is
still in full force and effect.
Dated March 22, 1996 GEORGIA POWER COMPANY
By /s/ Wayne Boston
Wayne Boston
Assistant Secretary
Exhibit 24(d)
February 23, 1996
Mr. W. L. Westbrook Mr. Wayne Boston
Southern Company Services, Inc. Southern Company Services, Inc.
64 Perimeter Center East 64 Perimeter Center East
Atlanta GA 30346 Atlanta GA 30346
Dear Sirs:
Re: Forms 10-K and 10-Q
Gulf Power Company proposes to file or join in the filing of statements
under the Securities Exchange Act of 1934 with the Securities and Exchange
Commission with respect to the following: (1) its Annual Report on Form 10-K for
the year ended December 31, 1995, and (2) its 1996 quarterly reports on Form
10-Q.
Gulf Power Company and the undersigned Directors and Officers of said
Company, individually as a Director and/or as an Officer of the Company, hereby
make, constitute and appoint each of you our true and lawful Attorney for each
of us and in each of our names, places and steads to sign and cause to be filed
with the Securities and Exchange Commission in connection with the foregoing
said Annual Report on Form 10-K, quarterly reports on Form 10-Q and any
appropriate amendment or amendments thereto and any necessary exhibits.
Sincerely,
By /s/Travis J. Bowden
Travis J. Bowden
President and Chief Executive
Officer
<PAGE>
- 2 -
/s/Reed Bell /s/C. Walter Ruckel
Reed Bell C. Walter Ruckel
/s/Travis J. Bowden /s/Joseph K. Tannehill
Travis J. Bowden Joseph K. Tannehill
/s/Paul J. DeNicola /s/Arlan E. Scarbrough
Paul J. DeNicola Arlan E. Scarbrough
/s/Fred C. Donovan /s/Ronnie R. Labrato
Fred C. Donovan Ronnie R. Labrato
/s/W. D. Hull, Jr /s/Warren E. Tate
W. D. Hull, Jr Warren E. Tate
<PAGE>
Extract from minutes of meeting of the board of directors of Gulf Power Company.
- - - - - - - - - -
RESOLVED, That for the purpose of signing the statements under
the Securities Exchange Act of 1934 to be filed with the Securities and
Exchange Commission with respect to the filing of this Company's Annual
Report on Form 10-K for the year ended December 31, 1995, and its 1996
quarterly reports on Form 10-Q, and of remedying any deficiencies with
respect thereto by appropriate amendment or amendments (both before and
after such statements become effective), this Company, the members of
its Board of Directors, and its Officers, are authorized to give their
several powers of attorney to W. L. Westbrook and Wayne Boston.
- - - - - - - - - -
The undersigned officer of Gulf Power Company does hereby
certify that the foregoing is a true and correct copy of resolution duly and
regularly adopted at a meeting of the board of directors of Gulf Power Company,
duly held on February 23, 1996, at which a quorum was in attendance and voting
throughout, and that said resolution has not since been rescinded but is still
in full force and effect.
Dated March 22, 1996 GULF POWER COMPANY
By /s/ Wayne Boston
Wayne Boston
Assistant Secretary
Exhibit 24(e)
February 28, 1996
W. L. Westbrook and Wayne Boston
Dear Sirs:
Mississippi Power Company proposes to file or join in the filing of
statements under the Securities Exchange Act of 1934 with the Securities and
Exchange Commission with respect to the following: (1) the filing of its Annual
Report on Form 10-K for the year ended December 31, 1995, and (2) the filing of
its quarterly reports on Form 10-Q during 1996.
Mississippi Power Company and the undersigned directors and officers of
said Company, individually as a director and/or as an officer of the Company,
hereby make, constitute and appoint each of you our true and lawful Attorney for
each of us and in each of our names, places and steads to sign and cause to be
filed with the Securities and Exchange Commission in connection with the
foregoing said Annual Report on Form 10-K, quarterly reports on Form 10-Q and
any appropriate amendment or amendments thereto and any necessary exhibits.
Yours very truly,
MISSISSIPPI POWER COMPANY
By /s/Dwight H. Evans
Dwight H. Evans
President and Chief Executive
Officer
<PAGE>
- 2 -
/s/Paul J. DeNicola /s/George A. Schloegel
Paul J. DeNicola George A. Schloegel
/s/Edwin E. Downer /s/Philip J. Terrell
Edwin E. Downer Philip J. Terrell
/s/Dwight H. Evans /s/N. Eugene Warr
Dwight H. Evans N. Eugene Warr
/s/Robert S. Gaddis /s/Michael W. Southern
Robert S. Gaddis Michael W. Southern
/s/Walter H. Hurt, III /s/Frances V. Turnage
Walter H. Hurt, III Frances V. Turnage
/s/Aubrey K. Lucas
Aubrey K. Lucas
<PAGE>
Extract from minutes of meeting of the board of directors of Mississippi Power
Company.
- - - - - - - - - -
RESOLVED: That the members of this Company's Board of
Directors and its officers are authorized to give their several powers
of attorney to W. L. Westbrook and Wayne Boston for the purpose of
signing the statements under the Securities Exchange Act of 1934 to be
filed with the Securities and Exchange Commission with respect to the
filing of the Company's Annual Report on Form 10-K for the year ended
December 31, 1995, and the filing of this Company's quarterly reports
to the Securities and Exchange Commission on Form 10-Q for the year
1996.
- - - - - - - - - -
The undersigned officer of Mississippi Power Company does
hereby certify that the foregoing is a true and correct copy of resolution duly
and regularly adopted at a meeting of the board of directors of Mississippi
Power Company, duly held on February 28, 1996, at which a quorum was in
attendance and voting throughout, and that said resolution has not since been
rescinded but is still in full force and effect.
Dated March 22, 1996 MISSISSIPPI POWER COMPANY
By /s/ Wayne Boston
Wayne Boston
Assistant Secretary
Exhibit 24(f)
February 20, 1996
W. L. Westbrook and Wayne Boston
Dear Sirs:
Savannah Electric and Power Company proposes to file with the
Securities and Exchange Commission, under the Securities Exchange Act of 1934,
(1) its Annual Report on Form 10-K for the year ended December 31, 1995, and (2)
its quarterly reports on Form 10-Q during 1996.
Savannah Electric and Power Company and the undersigned directors and
officers of said Company, individually as a director and/or as an officer of the
Company, hereby make, constitute and appoint W. L. Westbrook and Wayne Boston
our true and lawful Attorneys for each of us and in each of our names, places
and steads to sign and cause to be filed with the Securities and Exchange
Commission in connection with the foregoing said Annual Report on Form 10-K,
quarterly reports on Form 10-Q, and any appropriate amendment or amendments
thereto and any necessary exhibits.
Yours very truly,
SAVANNAH ELECTRIC AND POWER COMPANY
By /s/Arthur M. Gignilliat, Jr.
Arthur M. Gignilliat, Jr.
President and Chief Executive
Officer
<PAGE>
- 2 -
/s/Helen Q. Artley /s/Arnold M. Tenenbaum
Helen Q. Artley Arnold M. Tenenbaum
/s/Paul J. DeNicola /s/Frederick F. Williams, Jr.
Paul J. DeNicola Frederick F. Williams, Jr.
/s/Brian R. Foster /s/K. R. Willis
Brian R. Foster K. R. Willis
/s/Arthur M. Gignilliat, Jr. /s/Nancy E. Frankenhauser
Arthur M. Gignilliat, Jr. Nancy E. Frankenhauser
/s/Walter D. Gnann /s/Lavonne K. Calandra
Walter D. Gnann Lavonne K. Calandra
/s/Robert B. Miller, III
Robert B. Miller, III
<PAGE>
Extract from minutes of meeting of the board of directors of Savannah Electric
and Power Company.
- - - - - - - - - -
RESOLVED: That for the purpose of signing statements required
to be filed by the Company under the Securities Exchange Act of 1934 to
be filed with the Securities and Exchange Commission including (a) the
filing of this Company's Annual Report on Form 10-K for the year ended
December 31, 1995, and (b) quarterly reports on Form 10-Q during
calendar year 1996; and of remedying any deficiencies with respect
thereto by appropriate amendment or amendments, this Company and the
members of its Board of Directors, and its officers, be and they are
hereby authorized to give their several powers of attorney to W. L.
Westbrook and Wayne Boston for the purposes set out above.
- - - - - - - - - -
The undersigned officer of Savannah Electric and Power Company
does hereby certify that the foregoing is a true and correct copy of resolution
duly and regularly adopted at a meeting of the board of directors of Savannah
Electric and Power Company, duly held on February 20, 1996, at which a quorum
was in attendance and voting throughout, and that said resolution has not since
been rescinded but is still in full force and effect.
Dated March 22, 1996 SAVANNAH ELECTRIC AND POWER COMPANY
By /s/ Wayne Boston
Wayne Boston
Assistant Secretary
