File No. 70-8461
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 15
(Post-Effective No. 12)
TO
FORM U-1
APPLICATION OR DECLARATION
under
The Public Utility Holding Company Act of 1935
ALABAMA POWER COMPANY GULF POWER COMPANY
600 North 18th Street 500 Bayfront Parkway
Birmingham, Alabama 35291 Pensacola, Florida 32501
GEORGIA POWER COMPANY MISSISSIPPI POWER COMPANY
333 Piedmont Avenue, N.E. 2992 West Beach
Atlanta, Georgia 30308 Gulfport, Mississippi 39501
SAVANNAH ELECTRIC AND POWER COMPANY
600 East Bay Street
Savannah, Georgia 31401
(Name of company or companies filing this statement
and addresses of principal executive offices)
THE SOUTHERN COMPANY
(Name of top registered holding company parent of each applicant or declarant)
Art P. Beattie, Vice President, Warren E. Tate, Secretary
Secretary and Treasurer and Treasurer
Alabama Power Company Gulf Power Company
600 North 18th Street 500 Bayfront Parkway
Birmingham, Alabama 35291 Pensacola, Florida 32501
Judy M. Anderson, Vice President Michael W. Southern, Vice
and Corporate Secretary President, Secretary and Treasurer
Georgia Power Company Mississippi Power Company
333 Piedmont Avenue, N.E. 2992 West Beach
Atlanta, Georgia 30308 Gulfport, Mississippi 39501
Kirby R. Willis, Vice President, Treasurer
and Chief Financial Officer
Savannah Electric and Power Company
600 East Bay Street
Savannah, Georgia 31401
(Names and addresses of agents for service)
The Commission is requested to mail signed copies of all orders, notices and
communications to:
W. L. Westbrook John D. McLanahan, Esq.
Financial Vice President Troutman Sanders LLP
The Southern Company 600 Peachtree Street, N.E.
270 Peachtree Street, NW Suite 5200
Atlanta, Georgia 30303 Atlanta, Georgia 30308-2216
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ITEM 1. DESCRIPTION OF PROPOSED TRANSACTIONS.
"It is considered that the record is now complete with respect to
the issuance by Georgia Power Capital Trust III of $189,250,000 aggregate
liquidation amount of its Trust Preferred Securities and the related issuance by
Georgia of the related series of Junior Subordinated Notes and the Guarantee.
The terms of such Trust Preferred Securities, Junior Subordinated Notes and
Guarantee will be as particularly described in Amendment No. 9 previously filed
herein.
The applicants request that the Commission reserve jurisdiction,
pending completion of the record, over the issuance and sale of preferred
securities through December 31, 2005, as follows: $500,000,000 for Alabama;
$310,750,000 for Georgia; $50,000,000 for Gulf; $75,000,000 for Mississippi; and
$40,000,000 for Savannah.
As described in Amendment No. 9, the Trust will issue only one
series of Trust Preferred Securities (the "Trust Preferred Securities") and the
distribution rate to be borne by the Trust Preferred Securities will not exceed
12.5% per annum (expressed as a percentage of liquidation amount) and shall also
be the distribution rate for the Trust Common Securities and the interest rate
for the related Junior Subordinated Notes (the "Securities Rate"). The Junior
Subordinated Notes will have a maturity of up to 50 years and will not be
convertible into any other securities or assets of Georgia or the Trust. In
addition, in view of the fact that the proceeds of the sale of the Trust
Preferred Securities will be loaned to Georgia, Georgia will agree to pay the
underwriters' compensation for their services in an amount not exceeding 4% of
the aggregate liquidation amount of such Trust Preferred Securities."
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ITEM 2. FEES, COMMISSIONS AND EXPENSES.
The estimated fees and expenses to be incurred by Georgia in
connection herewith are as follows:
Filing fees - Securities and Exchange Commission..................... $ 60,607
Fees and Expenses of Trustees........................................ 12,500
Listing on New York Stock Exchange................................... 58,300
Printing charges..................................................... 75,000
Rating Agency Fees................................................... 107,000
Services of Southern Company Services, Inc........................... 30,000
Fees and Expenses of counsel......................................... 45,000
Blue sky fees and expenses........................................... 3,500
Fees of accountants, Arthur Andersen LLP............................. 42,000
Miscellaneous........................................................ 26,093
TOTAL................................................. $460,000
ITEM 3. APPLICABLE STATUTORY PROVISIONS.
3.2 Rule 54 Analysis: The proposed transaction is also subject to Rule
54, which provides that, in determining whether to approve an application which
does not relate to any "exempt wholesale generator" ("EWG") or "foreign utility
company" ("FUCO"), the Commission shall not consider the effect of the
capitalization or earnings of any such EWG or FUCO which is a subsidiary of a
registered holding company if the requirements of Rule 53(a), (b) and (c) are
satisfied.
Southern currently meets all of the conditions of Rule 53(a), except
for clause (1). At April 30, 1997, Southern's "aggregate investment," as defined
in Rule 53(a)(1), in EWGs and FUCOs was approximately $2.102 billion, or about
56.38% of Southern's "consolidated retained earnings," also as defined in Rule
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53(a)(1), for the four quarters ended March 31, 1997 ($3,728 million). With
respect to Rule 53(a)(1), however, the Commission has determined that Southern's
financing of investments in EWGs and FUCOs in an amount greater than the amount
that would otherwise be allowed by Rule 53(a)(1) would not have either of the
adverse effects set forth in Rule 53(c). See The Southern Company, Holding
Company Act Release No. 16501, dated April 1, 1996 (the "Rule 53(c) Order"); and
Holding Company Act Release No. 26646, dated January 15, 1997 (order denying
request for reconsideration and motion to stay).
In addition, Southern has complied and will continue to comply with the
record-keeping requirements of Rule 53(a)(2), the limitation under Rule 53(a)(3)
on the use of Operating Company personnel to render services to EWGs and FUCOs,
and the requirements of Rule 53(a)(4) concerning the submission of copies of
certain filings under the Act to retail rate regulatory commissions. Further,
none of the circumstances described in Rule 53(b) has occurred.
Moreover, even if the effect of the capitalization and earnings of EWGs
and FUCOs in which Southern has an ownership interest upon the Southern holding
company system were considered, there is no basis for the Commission to withhold
or deny approval for the proposal made in this Application-Declaration. The
action requested in the instant filing (viz. Issuance of preferred securities by
Georgia Power Capital Trust III) would not, by itself, or even considered in
conjunction with the effect of the capitalization and earnings of Southern's
EWGs and FUCOs, have a material adverse effect on the financial integrity of the
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Southern system, or an adverse impact on Southern's public-utility subsidiaries,
their customers, or the ability of State commissions to protect such
public-utility customers.
The Rule 53(c) Order was predicated, in part, upon an assessment of
Southern's overall financial condition which took into account, among other
factors, Southern's consolidated capitalization ratio and the recent growth
trend in Southern's retained earnings. As of December 31, 1995, the most recent
fiscal year preceding the Rule 53(c) Order, Southern's consolidated
capitalization consisted of 49.3% equity (including mandatorily redeemable
preferred securities) and 50.7% debt (including $1.68 billion of long-term,
non-recourse debt and short-term debt related to EWGs and FUCOs). As of year-end
1996, that ratio was 52.9% equity and 47.1% debt (including $1.74 billion of
long-term, non-recourse debt and short-term debt related to EWGs and FUCOs); and
as of March 31, 1997, following completion of Southern's acquisition of a
controlling interest in Consolidated Electric Power Asia Ltd., the comparable
ratio was 48.7% equity and 51.3% debt (including $3.82 billion of long-term,
non-recourse debt and short-term debt related to EWGs and FUCOs). On a pro forma
basis, taking into account the effect of the proposed of the proposed issuance
of preferred securities by Georgia Power Capital Trust III, consolidated
capitalization would change only slightly to 49.1% equity and 50.9% debt. Thus,
since the date of the Rule 53(c) Order, there has been no material change in
Southern's consolidated capitalization ratio, which
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generally remains within accepted industry ranges and limits that rating
agencies set for "A" rated utility companies.1
Southern's consolidated retained earnings grew on average approximately
8.8% per year from 1991 through 1995. In 1996, consolidated retained earnings
increased $280,365,000, or slightly more than 8%. The small reduction in the
rate of earnings growth was primarily attributable to reduced domestic utility
sales due to mild weather conditions throughout most of 1996 in the southeastern
United States. Earnings attributable to Southern's investments in EWGs and FUCOs
continued to contribute modestly to consolidated retained earnings.
Accordingly, since the date of the Rule 53(c) Order, the capitalization
and earnings attributable to Southern's investments in EWGs and FUCOs has not
had any adverse impact on Southern's financial integrity.
Reference is made to Exhibit I filed herewith which reflects
capitalization at March 31, 1997 and the Statement of Income for the twelve
months ended March 31, 1997 for The Southern Company and subsidiaries
consolidated. In addition, the exhibit is adjusted to give effect to the
proposed issuance of $189,250,000 of preferred securities by Georgia Power
Capital Trust III.
1 Currently, capitalization ratios (including short-term debt and non-recourse
project debt) for "A" rated utilities are as follows:
`A' Industry Benchmark `A'
Average* Range*
Equity 51% 51 - 53%
Debt 49% 47 - 49%
*(Source: Standard & Poor's Utilities Rating Service, Financial
Statistics, Twelve Months Ended September 30, 1996. The
Benchmark `A' Range includes High Average and Average
Business Positions).
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ITEM 6. EXHIBITS AND FINANCIAL STATEMENTS.
A. Exhibits:
A-1 - Trust Agreement of Georgia Power Capital Trust III.
(Designated in Form S-3 File Nos. 333-06037, 333-06037-01,
333-06037-02, and 333-06037-03, as Exhibit 4.4-C.)
A-2 - Form of Amended and Restated Trust Agreement for Georgia
Power Capital Trust III. (Designated in Form S-3 File Nos.
333-06037, 333-06037-01, 333-06037-02, and 333-06037-03,
as Exhibit 4.5-C.)
B-1 - Form of Subordinated Note Indenture between Georgia Power
Company and The Chase Manhattan Bank, as Trustee.
(Designated in Form S-3 File Nos. 333-06037, 333-06037-01,
333-06037-02, and 333-06037-03, as Exhibit 4.1.)
B-2 - Form of Supplemental Indenture to Subordinated Note
Indenture between Georgia Power Company and The Chase
Manhattan Bank, as Trustee. (Designated in Form S-3 File
Nos. 333-06037, 333-06037-01, 333-06037-02, and
333-06037-03, as Exhibit 4.2.)
B-3 - Forms of Guarantee with respect to Preferred
Securities of Georgia Power Capital Trust I,
Georgia Power Capital Trust II and Georgia Power
Capital Trust III. (Designated in Form S-3 File
Nos. 333-06037, 333-06037-01, 333-06037-02, and
333-06037-03, as Exhibits 4.8-A, 4.8-B and 4.8-C.)
C-1 - Registration Statement under the Securities Act of 1933.
(Filed electronically May 30, 1997, File Nos. 333-28189
and 333-28189-01.)
C-2 - Amendment No. 1 to Registration Statement under the
Securities Act of 1933. (Filed electronically June 5,
1997, File Nos. 333-28189 and 333-28189-01.)
F-2 - Opinion of Troutman Sanders LLP, counsel for Georgia.
I - Capitalization and Income Statement of The Southern
Company and Subsidiary Companies after giving effect to
the issuance of the preferred securities.
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B. Financial Statements.
Balance sheet of Georgia at March 31, 1997. (Designated in
Georgia's Form 10-Q for the quarter ended March 31, 1997, File
No. 1-6468.)
Statements of Income of Georgia for the period ended March 31,
1997. (Designated in Georgia's Form 10-Q for the quarter ended
March 31, 1997, File No. 1-6468.)
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SIGNATURES
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, the undersigned companies have duly caused this amendment to be signed
on their behalf by the undersigned thereunto duly authorized.
Date: June 10, 1997 ALABAMA POWER COMPANY
By:/s/ Wayne Boston
Wayne Boston, Assistant Secretary
GEORGIA POWER COMPANY
By:/s/ Wayne Boston
Wayne Boston, Assistant Secretary
GULF POWER COMPANY
By:/s/ Wayne Boston
Wayne Boston, Assistant Secretary
MISSISSIPPI POWER COMPANY
By:/s/ Wayne Boston
Wayne Boston, Assistant Secretary
SAVANNAH ELECTRIC AND POWER COMPANY
By:/s/ Wayne Boston
Wayne Boston, Assistant Secretary
Exhibit F-2
TROUTMAN SANDERS LLP
600 PEACHTREE STREET
ATLANTA, GA 30308-2216
404-885-3000
June 10, 1997
Securities and Exchange Commission
Washington, D.C. 20549
Re: Statement on Form U-1 of
Georgia Power Company (the "Company") et al.
File No. 70-8461
Ladies and Gentlemen:
We have read the statement on Form U-1, as amended, referred
to above and are furnishing this opinion with respect to the proposed
transactions described therein relating to the issuance and sale by Georgia
Power Capital Trust III ("Georgia Power Capital") of its Trust Preferred
Securities and the related issuance by the Company of its Guarantee and Junior
Subordinated Notes (all as defined therein).
We are of the opinion that (i) the Company is validly
organized and duly existing as a corporation under the laws of the State of
Georgia, (ii) Georgia Power Capital Trust III has been duly formed and is
validly existing as a statutory business trust under the laws of the State of
Delaware, and (iii) upon the issuance of your order or orders in this matter
permitting such statement on Form U-1 to become effective with respect to such
proposed transactions, and in the event that the proposed transactions are
consummated in accordance with such statement on Form U-1 and your order or
orders in respect thereof:
(a) all State laws applicable to such proposed transactions will have
been complied with;
(b) the Company's obligations with respect to the
Guarantee and the Junior Subordinated Notes will be
valid and binding obligations of the Company in
accordance with their terms;
(c) Georgia Power Capital's obligations with respect to
the Trust Preferred Securities will be valid and
binding obligations of Georgia Power Capital in
accordance with their terms; and
(d) the consummation of the proposed transactions will
not violate the legal rights of the holders of any
securities issued by the Company, Georgia Power
Capital, or any associate company of either thereof.
We hereby give our written consent to the use of this opinion
in connection with the above-mentioned statement on Form U-1.
Very truly yours,
/s/ Troutman Sanders LLP
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<CAPTION>
Exhibit I
<S> <C> <C> <C> <C>
THE SOUTHERN COMPANY AND SUBSIDIARY COMPANIES
Capitalization Ratios at March 31, 1997
Consolidated Pro Forma
per 10-Q Amounts Equity Debt
---------------- ------------- ---------------- --------------
Capitalization (in thousands of dollars):
Common stock..........................................$3,405,594 $0 $3,405,594
Paid-in capital........................................2,125,534 0 2,125,534
Retained earnings......................................3,730,782 0 3,730,782
Preferred stock..........................................833,372 0 833,372
Capital & preferred securities.........................1,353,500 189,250 (A) 1,542,750
Long-term debt.........................................9,699,757 0 $9,699,757
Preferred due within one year............................116,155 0 116,155
Long-term debt due within one year.......................466,515 0 466,515
Notes payable & commercial paper.......................2,024,235 0 2,024,235
----------- ------------- ---------------- --------------
Total (Incl Amts Due in 1 Year)...............$23,755,444 $189,250 $11,754,187 $12,190,507
=========== ============= ================ ==============
Actual Amounts in Millions of Dollars....................$23,756 $11,565 $12,191
Actual Capitalization Ratios...............................100.0%. 48.7% 51.3%
Pro Forma Amounts in Millions of Dollars.................$23,945 $11,754 $12,191
Pro Forma Capitalization Ratios.......................... 100.0% 49.1% 50.9%
Pro Forma Consolidated Statements of Income (Unaudited)
(Stated in Thousands of Dollars)
For the Twelve Months Ended
March 31, 1997 Pro Forma As Adjusted
OPERATING REVENUES $ 10,512,948 $ - $ 10,512,948
---------------- ----------- ----------------
OPERATING EXPENSES:
Operation--
Fuel 2,228,043 - 2,228,043
Purchased power 1,289,336 - 1,289,336
Other 1,834,924 - 1,834,924
Maintenance 786,664 - 786,664
Depreciation and amortization 1,041,171 - 1,041,171
Amortization of deferred Plant Vogtle costs 140,518 - 140,518
Taxes other than income taxes 617,085 - 617,085
Income taxes 732,834 (5,673)(B) 727,161
---------------- ----------- ----------------
Total operating expenses 8,670,575 (5,673) 8,664,902
---------------- ----------- ----------------
OPERATING INCOME 1,842,373 5,673 1,848,046
OTHER INCOME:
Allowance for equity funds used during construction 3,862 - 3,862
Interest income 66,245 - 66,245
Other, net 34,269 - 34,269
Income taxes applicable to other income (2,764) - (2,764)
---------------- ----------- ----------------
INCOME BEFORE INTEREST CHARGES 1,943,985 5,673 1,949,658
---------------- ----------- ----------------
INTEREST CHARGES AND OTHER:
Interest on long-term debt 542,498 - 542,498
Allowance for debt funds used during construction (18,357) - (18,357)
Interest on notes payable 113,778 - 113,778
Amortization of debt discount, premium and expense, net 27,733 - 27,733
Other interest charges 48,100 - 48,100
Minority interest in subsidiaries 29,258 - 29,258
Distributions on capital and preferred securities of subsidiary companies 39,597 14,667 (B) 54,264
Preferred dividends of subsidiary companies 80,178 - 80,178
---------------- ----------- ----------------
Interest charges and other, net 862,785 14,667 877,452
---------------- ----------- ----------------
CONSOLIDATED NET INCOME $ 1,081,200 $ (8,994) $ 1,072,206
================ =========== ================
(A) To give effect to the issuance by Georgia Power Capital Trust III of
$189,250,000 of Preferred Securities. (B) To give effect to the issuance by
Georgia Power Capital Trust III of $189,250,000 of Preferred Securities at an
annual rate of 7.75%.
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