SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) February 20, 1998
ALABAMA POWER COMPANY
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(Exact name of registrant as specified in its charter)
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Alabama 1-3164 63-0004250
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(State or other jurisdiction (Commission File (IRS Employer Identification
of incorporation) Number) No.)
600 North 18th Street, Birmingham, Alabama 35291
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (205) 257-1000
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N/A
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(Former name or former address, if changed since last report.)
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Item 5. Other Events.
On February 20, 1998, Alabama Power Company (the "Company")
entered into an Underwriting Agreement covering the issue and sale by the
Company of $200,000,000 aggregate principal amount of its Series B 7% Senior
Quarterly Interest Notes due December 31, 2047. Said Notes were registered under
the Securities Act of 1933, as amended, pursuant to the shelf registration
statement (Registration Statement Nos. 333-40629, 333-40629-01, 333-40629-02 and
333-40629-03) of the Company.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
1 Underwriting Agreement, dated February 20, 1998, among the
Company and Morgan Stanley & Co. Incorporated, Credit Suisse
First Boston Corporation, A.G. Edwards & Sons, Inc., PaineWebber
Incorporated, Prudential Securities Incorporated, Smith Barney
Inc. and Edward D. Jones & Co., L.P. for themselves and as
representatives of the other underwriters named in Schedule I
thereto.
4.2 Second Supplemental Indenture to Senior Note Indenture dated as
of February 26, 1998, providing for the issuance of the Company's
Series B 7% Senior Quarterly Interest Notes due December 31,
2047.
4.7 Form of Series B 7% Senior Note (included in Exhibit 4.2 above).
12.1 Computation of ratio of earnings to fixed charges.
12.2 Computation of ratio of earnings to fixed charges plus preferred
dividend requirements (pre-income tax basis).
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SIGNATURE
Pursuant to the requirements 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.
Date: February 25, 1998 ALABAMA POWER COMPANY
By /s/ Wayne Boston
Wayne Boston
Assistant Secretary
Exhibit 1
$200,000,000 Series B 7 % Senior Quarterly Interest Notes
due December 31, 2047
ALABAMA POWER COMPANY
UNDERWRITING AGREEMENT
February 20, 1998
Morgan Stanley & Co. Incorporated
Credit Suisse First Boston Corporation
A.G. Edwards & Sons, Inc.
PaineWebber Incorporated
Prudential Securities Incorporated
Smith Barney Inc.
Edward D. Jones & Co., L.P.
As Representatives of the Several Underwriters
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Ladies and Gentlemen:
Alabama Power Company, an Alabama corporation (the "Company"),
confirms its agreement (the "Agreement") with you and each of the other
Underwriters named in Schedule I hereto (collectively, the "Underwriters", which
term shall also include any underwriter substituted as hereinafter provided in
Section 10 hereof), for whom you are acting as representatives (in such
capacity, you shall hereinafter be referred to as the "Representatives"), with
respect to the sale by the Company and the purchase by the Underwriters, acting
severally and not jointly, of $200,000,000 aggregate principal amount of the
Series B 7 % Senior Quarterly Interest Notes due December 31, 2047 (the "Senior
Notes") set forth in Schedule I.
The Company understands that the Underwriters propose to make
a public offering of the Senior Notes as soon as the Representatives deem
advisable after this Agreement has been executed and delivered. The Senior Notes
will be issued pursuant to an indenture, dated as of December 1, 1997 as
heretofore supplemented (the "Base Indenture"), between the Company and The
Chase Manhattan Bank, as trustee (the "Trustee"), and as further supplemented by
a second supplemental indenture to the Base Indenture relating to the Senior
Notes (the "Supplemental Indenture," and together with the Base Indenture and
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any other amendments or supplements thereto, the "Indenture"), between the
Company and the Trustee.
SECTION 1. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants
to each Underwriter as follows:
(a) A registration statement on Form S-3, as amended (File Nos.
333-40629, 333-40629-01, 333-40629-02 and 333-40629-03), in respect of
the Senior Notes and certain other securities has been prepared and
filed in accordance with the provisions of the Securities Act of 1933,
as amended (the "1933 Act"), with the Securities and Exchange
Commission (the "Commission"); such registration statement, as amended,
and any post-effective amendment thereto, each in the form heretofore
delivered or to be delivered to you, and to you for each of the other
Underwriters, has been declared effective by the Commission in such
form (except that copies of the registration statement, as amended, and
any post-effective amendment delivered to you for each of the other
Underwriters need not include exhibits but shall include all documents
incorporated by reference therein); and no stop order suspending the
effectiveness of such registration statement has been issued and no
proceeding for that purpose has been initiated or, to the best
knowledge of the Company, threatened by the Commission (any preliminary
prospectus, as supplemented by a preliminary prospectus supplement,
included in such registration statement or filed with the Commission
pursuant to Rule 424(a) of the rules and regulations of the Commission
under the 1933 Act, being hereinafter called a "Preliminary
Prospectus"); such registration statement, as it became effective,
including the exhibits thereto and all documents incorporated by
reference therein pursuant to Item 12 of Form S-3 at the time such
registration statement became effective, being hereinafter called the
"Registration Statement"; the prospectus relating to the Senior Notes,
in the form in which it was included in the Registration Statement at
the time it became effective, being hereinafter called the
"Prospectus"; any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under
the 1933 Act, as of the date of such Preliminary Prospectus or
Prospectus, as the case may be; any reference to any amendment or
supplement to any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include any documents filed after the date of
such Preliminary Prospectus or Prospectus, as the case may be, under
the Securities Exchange Act of 1934, as amended (the "1934 Act"), and
incorporated by reference in such Preliminary Prospectus or Prospectus,
as the case may be; any reference to any amendment to the Registration
Statement shall be deemed to refer to and include any annual report of
the Company filed pursuant to Section 13(a) or 15(d) of the 1934 Act
after the effective date of the Registration Statement that is
incorporated by reference in the Registration Statement; and the
Prospectus as amended or supplemented in final form by a prospectus
supplement relating to the Senior Notes in the form in which it is
filed with the Commission, pursuant to Rule 424(b) under the 1933 Act
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in accordance with Section 3(g) hereof, including any documents
incorporated by reference therein as of the date of such filing, being
hereinafter called the "Final Supplemented Prospectus".
(b) The documents incorporated by reference in the Registration
Statement or Prospectus, when they were filed with the Commission,
complied in all material respects with the applicable provisions of the
1934 Act and the rules and regulations of the Commission thereunder,
and as of such time of filing, when read together with the Prospectus,
none of such documents contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and any
further documents so filed and incorporated by reference in the
Prospectus or any further amendment or supplement thereto, when such
documents are filed with the Commission, will comply in all material
respects with the applicable provisions of the 1934 Act and the rules
and regulations of the Commission thereunder and, when read together
with the Prospectus as it otherwise may be amended or supplemented,
will not contain an 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, in the light of the circumstances under
which they were made, not misleading, except that the Company makes no
warranty or representation to any Underwriter with respect to: (A) any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter
through you expressly for use in the Final Supplemented Prospectus; or
(B) any information set forth in the Final Supplemented Prospectus
under the caption "Description of the Series B Senior Notes -
Book-Entry Only Issuance -- The Depository Trust Company".
(c) The Registration Statement and the Prospectus comply, and the Final
Supplemented Prospectus and any further amendments or supplements to
the Registration Statement or the Prospectus, when any such
post-effective amendments are declared effective or supplements are
filed with the Commission, as the case may be, will comply, in all
material respects with the applicable provisions of the 1933 Act, the
1934 Act, the 1939 Act (hereinafter defined) and the General Rules and
Regulations of the Commission thereunder and do not and will not, (i)
as of the applicable effective date as to the Registration Statement
and any amendment thereto, and (ii) as of the applicable filing date as
to the Final Supplemented Prospectus and any Prospectus as further
amended or supplemented, contain an untrue statement of a material fact
or omit to state a 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 the Company makes no warranties
or representations with respect to (A) that part of the Registration
Statement which shall constitute the Statements of Eligibility (Form
T-1) (collectively, the "Form T-1") under the Trust Indenture Act of
1939, as amended (the "1939 Act"), (B) statements or omissions made in
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the Registration Statement or the Final Supplemented Prospectus in
reliance upon and in conformity with information furnished in writing
to the Company by an Underwriter expressly for use therein or (C) any
information set forth in the Final Supplemented Prospectus under the
caption "Description of the Series B Senior Notes - Book-Entry Only
Issuance -- The Depository Trust Company".
(d) With respect to the Registration Statement, the conditions for use
of Form S-3, as set forth in the General Instructions thereof, have
been satisfied.
(e) Since the respective dates as of which information is given in the
Registration Statement and the Final Supplemented Prospectus, except as
otherwise stated therein, there has been no material adverse change in
the business, properties or financial condition of the Company.
(f) The Company is a corporation duly organized and existing under the
laws of the State of Alabama 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, to enter into and
perform its obligations under this Agreement and the Indenture and to
issue and sell the Senior Notes to the Underwriters.
(g) This Agreement has been duly authorized, executed and delivered by
the Company.
(h) The Indenture has been duly authorized by the Company and, on the
Closing Date, will have been duly executed and delivered by the
Company, and, assuming due authorization, execution and delivery of the
Indenture by the Trustee, the Indenture will, on the Closing Date,
constitute a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms except to the extent
that enforcement thereof may be limited by (1) bankruptcy, insolvency,
reorganization, receivership, liquidation, fraudulent conveyance,
moratorium or other similar laws affecting creditors' rights generally
or (2) general principles of equity (regardless of whether enforcement
is considered in a proceeding at law or in equity) (the "Enforceability
Exceptions"); the Indenture will conform in all material respects to
all statements relating thereto contained in the Final Supplemented
Prospectus; and, on the Closing Date, the Indenture will have been duly
qualified under the 1939 Act.
(i) The issuance and delivery of the Senior Notes have been duly
authorized by the Company and, on the Closing Date, the Senior Notes
will have been duly executed by the Company and, when authenticated in
the manner provided for in the Indenture and delivered against payment
therefor as described in the Final Supplemented Prospectus, will
constitute valid and legally binding obligations of the Company,
enforceable against the Company in accordance with their terms, except
to the extent that enforcement thereof may be limited by the
Enforceability Exceptions, will be in the form contemplated by, and
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entitled to the benefits of, the Indenture and will conform in all
material respects to all statements relating thereto in the Final
Supplemented Prospectus.
(j) The execution, delivery and performance by the Company of this
Agreement, the Indenture and the Senior Notes and the consummation by
the Company of the transactions contemplated herein and therein and
compliance by the Company with its obligations hereunder and thereunder
shall have been duly authorized by all necessary corporate action on
the part of the Company and do not and will not result in any violation
of the charter or bylaws of the Company, and do not and will not
conflict with, or result in a breach of any of the terms or provisions
of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company under (A) 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 its
properties may be subject (except for conflicts, breaches or defaults
which would not, individually or in the aggregate, be materially
adverse to the Company or materially adverse to the transactions
contemplated by this Agreement), or (B) any existing applicable law,
rule, regulation, judgment, order or decree of any government,
governmental instrumentality or court, domestic or foreign, or any
regulatory body or administrative agency or other governmental body
having jurisdiction over the Company, or any of its properties.
(k) No authorization, approval, consent or order of any court or
governmental authority or agency is necessary in connection with the
issuance and sale by the Company of the Senior Notes or the
transactions by the Company contemplated in this Agreement, except (A)
such as may be required under the 1933 Act or the rules and regulations
thereunder; (B) such as may be required under the Public Utility
Holding Company Act of 1935, as amended (the "1935 Act"); (C) the
qualification of the Indenture under the 1939 Act; (D) the approval of
the Alabama Public Service Commission (the "Alabama Commission"); and
(E) such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky
laws.
SECTION 2. SALE AND DELIVERY TO UNDERWRITERS; CLOSING.
(a) On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
agrees to sell to each Underwriter, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase from the Company, the
principal amount of Senior Notes set forth in Schedule I opposite the name of
such Underwriter (plus any additional amount of Senior Notes that such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof) at a price equal to 96.85% of the principal amount thereof;
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except that such price will be increased to 99% of the principal amount of the
Senior Notes sold to certain institutions.
(b) Payment for and delivery of certificates for the Senior
Notes shall be made at the offices of Dewey Ballantine LLP, 1301 Avenue of the
Americas, New York, New York 10019 at 10:00 A.M., New York time, on February 26,
1998 (unless postponed in accordance with the provisions of Section 10) or such
other time, place or date as shall be agreed upon by the Representatives and the
Company (such time and date of payment and delivery being herein called the
"Closing Date"). Payment shall be made to the Company by wire transfer in
federal funds at the Closing Date against delivery of the Senior Notes to the
Representatives for the respective accounts of the Underwriters. It is
understood that each Underwriter has authorized the Representatives, for its
account, to accept delivery of, receipt for, and make payment of the principal
amount of the Senior Notes which it has agreed to purchase. The Representatives,
individually and not as Representatives of the Underwriters, may (but shall not
be obligated to) make payment of the principal amount of the Senior Notes to be
purchased by any Underwriter whose payment has not been received by the Closing
Date, but such payment shall not relieve such Underwriter from its obligations
hereunder.
The delivery of the Senior Notes shall be made in fully
registered form, registered in the name of CEDE & CO., to the offices of The
Depository Trust Company in New York, New York or its designee, and the
Underwriters shall accept such delivery.
The certificate(s) for the Senior Notes will be made available
for examination by the Representatives not later than 12:00 Noon, New York time,
on the last business day prior to the Closing Date.
SECTION 3. COVENANTS OF THE COMPANY. The Company covenants with each
Underwriter as follows:
(a) The Company, on or prior to the Closing Date, will deliver to the
Underwriters conformed copies of the Registration Statement as
originally filed and of all amendments thereto, heretofore or hereafter
made, including any post-effective amendment (in each case including
all exhibits filed therewith, and including unsigned copies of each
consent and certificate included therein or filed as an exhibit
thereto, except exhibits incorporated by reference, unless specifically
requested). As soon as the Company is advised thereof, it will advise
the Representatives orally of the issuance of any stop order under the
1933 Act with respect to the Registration Statement, or the institution
of any proceedings therefor, of which the Company shall have received
notice, and will use its best efforts to prevent the issuance of any
such stop order and to secure the prompt removal thereof, if issued.
The Company will deliver to the Underwriters sufficient conformed
copies of the Registration Statement, the Prospectus and the Final
Supplemented Prospectus and of all supplements and amendments thereto
(in each case without exhibits) for distribution to each Underwriter
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and, from time to time, as many copies of the Prospectus and the Final
Supplemented Prospectus as the Underwriters may reasonably request for
the purposes contemplated by the 1933 Act or the 1934 Act.
(b) The Company will furnish the Underwriters with copies of each
amendment and supplement to the Final Supplemented Prospectus relating
to the offering of the Senior Notes in such quantities as the
Underwriters may from time to time reasonably request. If, during the
period (not exceeding nine months) when the delivery of a prospectus
shall be required by law in connection with the sale of any Senior
Notes by an Underwriter or dealer, any event relating to or affecting
the Company, or of which the Company shall be advised in writing by the
Underwriters, shall occur, which in the opinion of the Company or of
Underwriters' counsel should be set forth in a supplement to or an
amendment of the Final Supplemented Prospectus in order to make the
Final Supplemented Prospectus not misleading in the light of the
circumstances when it is delivered, or if for any other reason it shall
be necessary during such period to amend or supplement the Final
Supplemented Prospectus or to file under the 1934 Act any document
incorporated by reference in the Preliminary Prospectus or Prospectus
in order to comply with the 1933 Act or the 1934 Act, the Company
forthwith will (i) notify the Underwriters to suspend solicitation of
purchases of the Senior Notes and (ii) at its expense, make any such
filing or prepare and furnish to the Underwriters a reasonable number
of copies of a supplement or supplements or an amendment or amendments
to the Final Supplemented Prospectus which will supplement or amend the
Final Supplemented Prospectus so that, as supplemented or amended, it
will not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements
therein, in the light of the circumstances when the Final Supplemented
Prospectus is delivered, not misleading or which will effect any other
necessary compliance. In case any Underwriter is required to deliver a
prospectus in connection with the sale of any Senior Notes after the
expiration of the period specified in the preceding sentence, the
Company, upon the request of such Underwriter, will furnish to such
Underwriter, at the expense of such Underwriter, a reasonable quantity
of a supplemented or amended prospectus, or supplements or amendments
to the Final Supplemented Prospectus, complying with Section 10(a) of
the 1933 Act. During the period specified in the second sentence of
this subsection, the Company will continue to prepare and file with the
Commission on a timely basis all documents or amendments required under
the 1934 Act and the rules and regulations thereunder; provided, that
the Company shall not file such documents or amendments without also
furnishing copies thereof prior to such filing to the Representatives
and Dewey Ballantine LLP.
(c) The Company will endeavor, in cooperation with the Underwriters, to
qualify the Senior Notes for offering and sale under the applicable
securities laws of such states and the other jurisdictions of the
United States as the Representatives may designate; provided, however,
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that the Company shall not be obligated to qualify as a foreign
corporation in any jurisdiction in which it is not so qualified or to
file a consent to service of process or to file annual reports or to
comply with any other requirements in connection with such
qualification deemed by the Company to be unduly burdensome.
(d) The Company will make generally available to its security holders
as soon as practicable but not later than 45 days after the close of
the period covered thereby, an earnings statement of the Company (in
form complying with the provisions of Rule 158 of the rules and
regulations under the 1933 Act) covering a twelve-month period
beginning not later than the first day of the Company's fiscal quarter
next following the "effective date" (as defined in Rule 158) of the
Registration Statement.
(e) The Company will use its best efforts to effect the listing of the
Senior Notes on the New York Stock Exchange.
(f) During a period of 15 days from the date of this Agreement, the
Company will not, without the Representatives' prior written consent,
directly or indirectly, sell, offer to sell, grant any option for the
sale of, or otherwise dispose of, any Senior Notes or any security
convertible into or exchangeable into or exercisable for the Senior
Notes or any debt securities substantially similar to the Senior Notes
(except for the Senior Notes issued pursuant to this Agreement).
(g) As soon as practicable after the date of this Agreement, and in any
event within the time prescribed by Rule 424 under the 1933 Act, to
file the Final Supplemented Prospectus with the Commission and to
advise the Representatives of such filing and to confirm such advice in
writing.
SECTION 4. PAYMENT OF EXPENSES. Except to the extent otherwise provided in
Section 13 hereof, the Company will pay all expenses incidental to the
performance of its obligations under this Agreement, including but not limited
to, the expenses of (i) the printing and filing of the Registration Statement as
originally filed and of each amendment thereto, (ii) the preparation, issuance
and delivery of the certificate(s) for the Senior Notes to the Underwriters,
(iii) the fees and disbursements of the Company's counsel and accountants, (iv)
the qualification of the Senior Notes under securities laws in accordance with
the provisions of Section 3(c) hereof, including filing fees and the reasonable
fees and disbursements of counsel for the Underwriters in connection therewith
and in connection with the preparation of any blue sky survey (such fees and
disbursements of counsel shall not exceed $3,500), (v) the printing and delivery
to the Underwriters of copies of the Registration Statement as originally filed
and of each amendment thereto and of the Prospectus, the Final Supplemented
Prospectus, and any amendments or supplements thereto, (vi) the printing and
delivery to the Underwriters of copies of any blue sky survey, (vii) the fee of
the National Association of Securities Dealers, Inc. in connection with its
review of the offering contemplated by this Agreement, if applicable, (viii) the
fees and expenses of the Trustee, including the fees and disbursements of
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counsel for the Trustee in connection with the Indenture and the Senior Notes,
(ix) any fees payable in connection with the rating of the Senior Notes, (x) the
fees and expenses incurred in connection with the listing of the Senior Notes on
the New York Stock Exchange, (xi) the cost and charges of any transfer agent or
registrar, and (xii) the cost of qualifying the Senior Notes with The Depository
Trust Company.
Except as otherwise provided in Section 9 hereof, the
Underwriters shall pay all other expenses incurred by them in connection with
their offering of the Senior Notes including fees and disbursements of their
counsel, Dewey Ballantine LLP.
SECTION 5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the
Underwriters to purchase and pay for the Senior Notes are subject to the
following conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall be in effect on the Closing Date and no proceedings for
that purpose shall be pending before, or to the knowledge of the
Company threatened by, the Commission on such date. If filing of the
Final Supplemented Prospectus, or any supplement thereto, is required
pursuant to Rule 424, the Final Supplemented Prospectus, and any such
supplement, shall have been filed in the manner and within the time
period required by Rule 424.
(b) Any required orders of the Alabama Commission and the Commission
permitting the transactions contemplated hereby substantially in
accordance with the terms and conditions hereof shall be in full force
and effect and shall contain no provision unacceptable to the
Underwriters or the Company (but all provisions of such order or orders
heretofore entered, copies of which have heretofore been delivered to
the Representatives, are deemed acceptable to the Underwriters and the
Company and all provisions of such order or orders hereafter entered
shall be deemed acceptable to the Underwriters and the Company unless
within 24 hours after receiving a copy of any such order any party to
this Agreement shall give notice to the other parties to the effect
that such order contains an unacceptable provision).
(c) On the Closing Date the Representatives shall have received:
(1) The opinion, dated the Closing Date, of Balch & Bingham
LLP, general counsel for the Company, substantially in the form
attached hereto as Schedule II-A.
(2) The opinion, dated the Closing Date, of Troutman Sanders
LLP, counsel for the Company, substantially in the form attached hereto
as Schedule II-B.
(3) The opinion, dated the Closing Date, of Cravath, Swaine &
Moore, counsel to the Trustee, substantially in the form attached
hereto as Schedule III.
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(4) The opinion, dated as of the Closing Date, of Dewey
Ballantine LLP, counsel for the Underwriters, substantially in the form
attached hereto as Schedule IV.
(5) At the Closing Date, there shall not have been, since the
date hereof or since the respective dates as of which information is
given in the Registration Statement and the Final Supplemented
Prospectus, any material adverse change in the business, properties or
financial condition of the Company, whether or not arising in the
ordinary course of business, and the Representatives shall have
received a certificate of the President or any Vice President of the
Company, and dated as of the Closing Date, to the effect that (i) there
has been no such material adverse change, (ii) the representations and
warranties in Section 1 hereof are true and correct with the same force
and effect as though expressly made at and as of the Closing Date,
(iii) the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied on or prior to the
Closing Date, and (iv) no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings for that
purpose have been initiated or, to the knowledge of the Company,
threatened by the Commission.
(6) On the Closing Date, the Representatives shall have
received from Arthur Andersen LLP a letter dated the Closing Date to
the effect that: (A) they are independent public accountants with
respect to the Company within the meaning of the 1933 Act and the rules
and regulations under the 1933 Act; (B) 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 1934 Act and the rules and
regulations under the 1934 Act; and (C) 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 (i) reading the
minute books of the Company; (ii) performing the procedures specified
by the American Institute of Certified Public Accountants ("AICPA") 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; and (iii) 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 Underwriters' purposes), nothing came to their attention that
caused them to believe that: (1) any material modifications should be
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made to the unaudited condensed financial statements, if any
incorporated in the Prospectus, for them to be in conformity with
generally accepted accounting principles; (2) such unaudited condensed
financial statements do not comply as to form in all material respects
with the applicable accounting requirements of the 1934 Act as it
applies to Form 10-Q and the related published rules and regulations
thereunder; (3) 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 Dividends 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 for the same period or were not determined on a basis
substantially consistent with that of the corresponding audited amounts
or ratios included or incorporated by reference in the Registration
Statement; (4) 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 which (i) the Prospectus discloses have occurred
or may occur, (ii) are occasioned by the declaration of dividends,
(iii) are occasioned by draw-downs under existing pollution control
financing arrangements, (iv) are occasioned by draw-downs and regularly
scheduled payments of capitalized lease obligations, (v) are occasioned
by the purchase or redemption of bonds or stock to satisfy mandatory or
optional redemption provisions relating thereto, or (vi) are disclosed
in such letter; and (5) the unaudited amounts for Operating Revenues,
Income Before Interest Charges and Net Income After Dividends Preferred
Stock and the unaudited Ratios of Earnings to Fixed Charges Plus
Preferred Dividend Requirements (Pre-Income Tax Basis) for any period
subsequent to those set forth in (3) above, which if available shall be
set forth in such letter, do not agree with the amounts set forth in or
derived from the unaudited financial statements for the same period or
were not determined on a basis substantially consistent with that of
the corresponding audited amounts or ratios included or incorporated by
reference in the Prospectus.
(7) On the Closing Date, counsel for the Underwriters shall
have been furnished with such documents and opinions as they may
reasonably require for the purpose of enabling them to pass upon the
issuance and sale of the Senior Notes as herein contemplated and
related proceedings, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company
in connection with the issuance and sale of the Senior Notes as herein
contemplated shall be satisfactory in form and substance to the
Representatives and Dewey Ballantine LLP, counsel for the Underwriters.
(8) On the Closing Date, the Senior Notes shall have been
approved for listing on the New York Stock Exchange upon notice of
issuance.
11
<PAGE>
(9) That no amendment or supplement to the Registration
Statement or the Final Supplemented Prospectus filed subsequent to the
date of this Agreement (including any filing made by the Company
pursuant to Section 13 or 14 of the 1934 Act) shall be unsatisfactory
in form to Dewey Ballantine LLP or shall contain information (other
than with respect to an amendment or supplement relating solely to the
activity of any Underwriter or Underwriters) which, in the reasonable
judgment of the Representatives, shall materially impair the
marketability of the Senior Notes.
(10) The Company shall have performed its obligations when and
as provided under this Agreement.
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by the Representatives by notice to the Company at any time prior to the Closing
Date, and such termination shall be without liability of any party to any other
party except as provided in Sections 4, 7 and 9(b) hereof.
SECTION 6. CONDITIONS OF THE OBLIGATIONS OF THE COMPANY.
The obligations of the Company shall be subject to the
conditions set forth in the first sentence of Section 5(a) and in Section 5(b).
In case such conditions shall not have been fulfilled, this Agreement may be
terminated by the Company by mailing or delivering written notice thereof to the
Underwriters. Any such termination shall be without liability of any party to
any other party except as otherwise provided in Sections 4, 7 and 9(b) hereof.
SECTION 7. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each of
the Underwriters and each person, if any, who controls any such Underwriter
within the meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934
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 1933 Act,
1934 Act or otherwise, and to reimburse the Underwriters 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 any Preliminary
Prospectus, the Registration Statement, the Prospectus, or the Final
Supplemented Prospectus or, if the Company shall furnish to the Underwriters any
amendments or any supplements thereto, or shall make any filings pursuant to
Section 13 or 14 of the 1934 Act which are incorporated therein by reference, in
any Preliminary Prospectus, the Registration Statement, the Prospectus, or the
Final Supplemented 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
12
<PAGE>
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 which was made in such
Registration Statement, Preliminary Prospectus, Prospectus, or the Final
Supplemented Prospectus in reliance upon and in conformity with information
furnished in writing to the Company by, or through the Representatives on behalf
of, any Underwriter for use therein and except that this indemnity with respect
to the Preliminary Prospectus, the Prospectus, or the Final Supplemented
Prospectus, if the Company shall have furnished any amendment or supplement
thereto, shall not inure to the benefit of any Underwriter (or of any person
controlling such Underwriter) on account of any losses, claims, damages,
liabilities or actions arising from the sale of the Senior Notes to any person
if a copy of the Preliminary Prospectus, the Prospectus, or the Final
Supplemented Prospectus (exclusive of documents incorporated therein 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
Underwriter 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 Preliminary Prospectus, the Prospectus, or
the Final Supplemented Prospectus as supplemented or amended at the time of such
confirmation. Each Underwriter 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 7, to notify the Company in writing of
the commencement thereof but the omission of such Underwriter so to notify the
Company of any such action shall not release the Company from any liability
which it may have to such Underwriter or to such controlling person otherwise
than on account of the indemnity agreement contained in this Section 7. In case
any such action shall be brought against the Underwriters or any such person
controlling such Underwriters and such Underwriter 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 Underwriter
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 Underwriter or controlling person unless the employment of such counsel has
been authorized in writing by the Company in connection with defending such
action. No indemnifying party shall, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or claim
in respect of which indemnification may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include any statement as to, or an admission of,
fault, culpability or a failure to act, by or on behalf of any indemnified
party. In no event shall any indemnifying party have any liability or
responsibility in respect of the settlement or compromise of, or consent to the
13
<PAGE>
entry of any judgment with respect to, any pending or threatened action or claim
effected without its prior written consent.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors and such of its officers
who have signed the Registration Statement and each other Underwriter and each
person, if any, who controls the Company or any such other Underwriter within
the meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934 Act to
the same extent and upon the same terms as the indemnity agreement of the
Company set forth in Section 7(a) hereof, but only with respect to alleged
untrue statements or omissions made in the Registration Statement, the
Preliminary Prospectus, the Prospectus, or the Final Supplemented Prospectus, or
such documents as amended or supplemented, in reliance upon and in conformity
with information furnished in writing to the Company by, or through the
Representatives on behalf of, such Underwriter for use therein.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY.
All representations, warranties and agreements 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 any investigation made by or on behalf of any Underwriter or
controlling person, or by, or on behalf of the Company and shall survive
delivery of the Senior Notes to the Underwriters.
SECTION 9. TERMINATION OF AGREEMENT.
(a) The Representatives may terminate this Agreement, by
notice to the Company, at any time at or prior to the Closing Date if (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, 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 the United States Congress or any other
substantial national or international calamity or emergency affecting the United
States, in any such case provided for in clauses (i) through (iv) with the
result that, in the reasonable judgement of the Representatives, the
marketability of the Senior Notes shall have been materially impaired.
(b) If this Agreement shall be terminated by the
Representatives pursuant to subsection (a) above or because of any failure or
refusal on the part of the Company to comply with the terms or to fulfill any of
the conditions of this Agreement, or if for any reason the Company shall be
unable to perform its obligations under this Agreement, then in any such case,
the Company will reimburse the Underwriters, severally, for the reasonable fees
and disbursements of Dewey Ballantine LLP and for the out of pocket expenses (in
14
<PAGE>
an amount not exceeding $10,000) reasonably incurred by the Underwriters in
making preparations for the purchase, sale and delivery of the Senior Notes and,
upon such reimbursement, the Company shall be absolved from any further
liability hereunder, except as provided in Sections 4 and 7.
SECTION 10. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS.
If one or more of the Underwriters shall fail on the Closing
Date to purchase the Senior Notes that it or they are obligated to purchase
under this Agreement (the "Defaulted Securities"), the Representatives shall
have the right, within 24 hours thereafter, to make arrangements for one or more
of the non-defaulting Underwriters, or any other underwriters, to purchase all,
but not less than all, of the Defaulted Securities in such amounts as may be
agreed upon and upon the terms herein set forth; if, however, the
Representatives shall not have completed such arrangements within such 24-hour
period, then:
(a) if the principal amount of Defaulted Securities does not exceed 10%
of the Senior Notes, each of the non-defaulting Underwriters shall be
obligated, severally and not jointly, to purchase the full amount
thereof in the proportions that their respective underwriting
obligations hereunder bear to the underwriting obligations of all
non-defaulting Underwriters, or
(b) if the principal amount of Defaulted Securities exceeds 10% of the
Senior Notes, this Agreement shall terminate without liability on the
part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement, either the Representatives or the Company shall
have the right to postpone the Closing Date for a period not exceeding seven
days in order to effect any required changes in the Registration Statement or
Final Supplemented Prospectus or in any other documents or arrangements.
SECTION 11. NOTICES. 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 Underwriters shall be
directed to you, c/o Morgan Stanley & Co. Incorporated, 1585 Broadway, New York,
New York 10036, Attention: Syndicate Department; notices to the Company shall be
delivered to 600 North 18th Street, Birmingham, Alabama 35291, Attention:
Corporate Secretary, with a copy to Southern Company Services, Inc., 270
Peachtree Street, N.W., Atlanta, Georgia 30303, Attention:
Charles N. Eldred.
15
<PAGE>
SECTION 12. PARTIES. This Agreement shall inure to the benefit of and be binding
upon the Underwriters, the Company and their respective successors. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any person, firm or corporation, other than the Underwriters and the
Company and their respective successors and the controlling persons and officers
and directors referred to in Section 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Underwriters and the Company and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Senior Notes from any Underwriter shall be deemed
to be a successor by reason merely of such purchase.
SECTION 13. COMPANY EXPENSES. The Underwriters severally agree to reimburse the
Company for expenses incurred in connection with the issuance and sale of the
Senior Notes in an amount not to exceed $400,000. Such expenses may include,
among other things, filing fees, counsel fees, trustees fees and printing costs.
The Company will provide to Morgan Stanley & Co. Incorporated a statement of
such expenses prior to the Closing Date and the amount of such expenses shall be
paid by wire transfer in federal funds at the Closing. Such expenses shall be
allocated to each Underwriter in such proportion as the principal amount of
Senior Notes to be purchased by such Underwriter bears to the aggregate
principal amount of the Senior Notes.
SECTION 14. GOVERNING LAW AND TIME. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed in said State. Except as otherwise set forth
herein, specified times of day refer to New York City time.
SECTION 15. COUNTERPARTS. This Agreement may be executed by any one or more of
the parties hereto in any number of counterparts, each of which shall be deemed
to be an original, but all such respective counterparts shall together
constitute one and the same instrument.
16
<PAGE>
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between the Underwriters and the Company in accordance with its terms.
Very truly yours,
ALABAMA POWER COMPANY
By: ____________________________________
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written
MORGAN STANLEY & CO. INCORPORATED
CREDIT SUISSE FIRST BOSTON CORPORATION
A.G. EDWARDS & SONS, INC.
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
SMITH BARNEY INC.
EDWARD D. JONES & CO., L.P.
By: MORGAN STANLEY & CO. INCORPORATED
By:______________________,
Title
As Representatives of the other
Underwriters named in Schedule I hereto.
<PAGE>
SCHEDULE I
Principal Amount of Series B
NAME OF UNDERWRITER 7 % Senior Notes
Morgan Stanley & Co. Incorporated $23,150,000
Credit Suisse First Boston Corporation 22,875,000
A.G. Edwards & Sons, Inc. 22,875,000
PaineWebber Incorporated 22,875,000
Prudential Securities Incorporated 22,875,000
Smith Barney Inc. 22,875,000
Edward D. Jones & Co., L.P. 22,875,000
Robert W. Baird & Co. Incorporated 1,500,000
J.C. Bradford & Co. 1,500,000
BT Alex. Brown Incorporated 1,500,000
CIBC Oppenheimer Corp. 1,500,000
EVEREN Securities, Inc. 1,500,000
Goldman, Sachs & Co. 1,500,000
Interstate/Johnson Lane Corporation 1,500,000
Lehman Brothers Inc. 1,500,000
Morgan Keegan & Company, Inc. 1,500,000
Regions Investment Company, Inc. 1,500,000
SouthTrust Securities, Inc. 1,500,000
Sterne, Agree & Leach, Inc. 1,500,000
Tucker Anthony Incorporated 1,500,000
Wheat First Securities, Inc. 1,500,000
Advest, Inc. 600,000
Cowen & Company 600,000
Craigie Incorporated 600,000
Crowell, Weedon & Co. 600,000
Dain Rauscher Incorporated 600,000
Davenport & Company LLC 600,000
Fahnestock & Co. Inc. 600,000
First Albany Corporation 600,000
J.J.B. Hilliard, W.L.Lyons, Inc. 600,000
Janney Montgomery Scott Inc. 600,000
Kennedy, Cabot & Co. 600,000
Legg Mason Wood Walker, Incorporated 600,000
McDonald & Company Securities, Inc. 600,000
McGinn, Smith & Co., Inc. 600,000
Mesirow Financial, Inc. 600,000
H.J. Meyers & Co., Inc. 600,000
The Ohio Company 600,000
Olde Discount Corporation 600,000
Pershing Division of Donaldson, Lufkin, 600,000
& Jenrette Securities Corporation
Piper Jaffray Inc. 600,000
Pryor, McClendon, Counts & Co., Inc. 600,000
Raymond James & Associates, Inc. 600,000
The Robinson-Humphrey Company, LLC 600,000
Roney & Co., L.L.C. 600,000
Scott & Stringfellow, Inc. 600,000
Muriel Siebert & Co., Inc. 600,000
Stephens Inc. 600,000
Stifel, Nicolaus & Company Incorporated 600,000
Sutro & Co., Incorporated 600,000
U.S. Clearing Corp. 600,000
Wedbush Morgan Securities 600,000
--------------
TOTAL $200,000,000
<PAGE>
Schedule II-A
[Letterhead of Balch & Bingham LLP]
___________ __, 199_
Morgan Stanley & Co. Incorporated
Credit Suisse First Boston Corporation
A.G. Edwards & Sons, Inc.
PaineWebber Incorporated
Prudential Securities Incorporated
Smith Barney Inc.
Edward D. Jones & Co., L.P.
As Representatives of the Several Underwriters
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
ALABAMA POWER COMPANY
Series B __ % SENIOR QUARTERLY INTEREST NOTES
DUE DECEMBER 31, 2047
Dear Sirs:
We have acted as general counsel to Alabama Power Company (the
"Company") in connection with (i) the Company's issuance of $______ aggregate
principal amount of its Series B __ % Senior Quarterly Interest Notes due
December 31, 2047 (the "Notes") pursuant to a Senior Note Indenture dated as of
December 1, 1997, by and between the Company and The Chase Manhattan Bank, as
trustee (the "Trustee"), as heretofore supplemented and as further supplemented
by the Second Supplemental Indenture dated as of __________ __, 199_
(collectively, the "Indenture"); and (ii) the purchase by you of the Notes
pursuant to the terms of an Underwriting Agreement dated _______, 1998, among
the Company and the underwriters named in Schedule I thereto (the
"Underwriters") for whom you are acting as Representatives (the "Underwriting
Agreement"). This opinion is being delivered to you as Representatives pursuant
to Section 5(c)(1) thereof.
All capitalized terms not otherwise defined herein shall have
the meanings set forth in the Underwriting Agreement.
In rendering the opinions expressed below, we have examined
the registration statement on Form S-3 (Nos. 333-40629, 333-40629-01,
333-40629-02 and 333-40629-03) pertaining to the Notes (the "Registration
1
<PAGE>
Statement") filed under the Securities Act of 1933, as amended (the "Act"), and
the prospectus dated December 2, 1997 as supplemented by a final prospectus
supplement dated __________, 199_ (the "Final Supplemented Prospectus"), which
pursuant to Form S-3 incorporates by reference the Annual Report on Form 10-K of
the Company for the fiscal year ended __________________, 199_, 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 (the "Exchange
Act").
In addition, we have examined, and have relied as to matters
of fact upon, the documents delivered to you at the closing (except the Notes,
of which we have examined a specimen), and we have made such other and further
investigations as we deemed necessary to express the opinions hereinafter set
forth.
The Indenture and the Underwriting Agreement are herein
referred to as the "Agreements".
We are of the opinion, relying as to matters of New York law
upon the opinion dated the date hereof rendered to you by Dewey Ballantine LLP,
that:
1. The Company has been duly organized and is validly existing and in
good standing as a corporation under the laws of the State of Alabama 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 and to
enter into and perform its obligations under the Agreements and the Notes.
2. The execution, delivery and performance by the Company of the
Underwriting Agreement have been duly authorized by all necessary corporate
action, and the Underwriting Agreement has been duly executed and delivered by
the Company.
3. All orders, consents, or other authorizations or approvals of the
Alabama Public Service Commission and the Commission legally required for the
issuance and sale of the Notes have been obtained; such orders are sufficient
for the issuance and the sale of the Notes; the issuance and the sale of the
Notes conform in all material respects with the terms of such orders; and no
other order, consent or other authorization or approval of any Alabama or United
States 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 and sale of the
Notes in accordance with the terms of the Underwriting Agreement.
4. The Indenture has been duly authorized, executed and delivered by
the Company and, assuming the due authorization, execution and delivery thereof
by the Trustee, constitutes a valid and legally binding instrument of the
Company, enforceable against the Company in accordance with its terms, subject
2
<PAGE>
to the qualifications that the enforceability of the Company's obligations under
the Indenture may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally and by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law); and the
Indenture conforms as to legal matters in all material respects to the
description thereof in the Final Supplemented Prospectus.
5. The Notes have been duly authorized and executed by the Company and,
when authenticated by the Trustee in the manner provided in the Indenture and
delivered to and paid for by the Underwriters pursuant to the Underwriting
Agreement, will constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, subject to the
qualifications that the enforceability of the Company's obligations under the
Notes may be limited by bankruptcy, insolvency, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally and by
general principles of equity; and the Notes conform as to legal matters in all
material respects to the description thereof in the Final Supplemented
Prospectus.
6. The Indenture has been duly qualified under the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act").
We have not independently verified the accuracy, completeness
or fairness of the statements made or included in the Registration Statement,
the Final Supplemented Prospectus or the Exchange Act Documents and take no
responsibility therefor, except as and to the extent set forth in paragraphs 4
and 5 above and in the Final Supplemented Prospectus in the second paragraph
under the caption "Experts". In the course of the preparation by the Company of
the Registration Statement, the Final Supplemented Prospectus and the Exchange
Act Documents, we participated in conferences with certain officers and
employees of the Company, with other counsel for the Company and with
representatives of Arthur Andersen LLP. Based upon our examination of the
Registration Statement, the Final Supplemented Prospectus and the Exchange Act
Documents, our investigations made in connection with the preparation of the
Registration Statement, the Final Supplemented Prospectus and the Exchange Act
Documents and our participation in the conferences referred to above, (i) we are
of the opinion that the Registration Statement, as of its effective date, and
the Final Supplemented Prospectus, as of __________, complied as to form in all
material respects with the requirements of the 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 Statement, the Final Supplemented Prospectus or the Exchange Act
Documents, and (ii) nothing came to our attention which gives us reason to
believe that the Registration Statement, as of its effective date (including the
Exchange Act Documents on file with the Commission as of such date), contained
3
<PAGE>
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 Final Supplemented Prospectus (including the
Exchange Act Documents) contains any untrue statement therein of a material fact
or omits to state a 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 Statement, the Final
Supplemented Prospectus or the Exchange Act Documents and with respect to
information set forth in the Final Supplemented Prospectus under the caption
"Description of the Series B Senior Notes - Book-Entry Only Issuance - The
Depository Trust Company."
We are members of the State Bar of Alabama and we do not
express any opinion herein concerning any law other than the law of such State
and the federal law of the United States and, to the extent set forth herein,
the law of the State of New York.
This opinion is rendered to you in connection with the
above-described transaction. This opinion may not be relied upon by you for any
other purpose, or relied upon by or furnished to any other person without our
prior written consent, except that Troutman Sanders LLP and Dewey Ballantine LLP
may rely on this opinion in giving their opinions pursuant to Section 5(c) of
the Underwriting Agreement insofar as such opinion relates to matters of Alabama
law.
Yours very truly,
BALCH & BINGHAM LLP
4
<PAGE>
Schedule II-B
[Letterhead of TROUTMAN SANDERS LLP]
__________ __, 199_
Morgan Stanley & Co. Incorporated
Credit Suisse First Boston Corporation
A.G. Edwards & Sons, Inc.
PaineWebber Incorporated
Prudential Securities Incorporated
Smith Barney Inc.
Edward D. Jones & Co., L.P.
As Representatives of the Several Underwriters
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
ALABAMA POWER COMPANY
Series B __ % SENIOR QUARTERLY INTEREST NOTES
DUE DECEMBER 31, 2047
Dear Sirs:
We have acted as counsel to Alabama Power Company (the
"Company") in connection with (i) the Company's issuance of $__________
aggregate principal amount of its Series B __% Senior Quarterly Interest Notes
due December 31, 2047 (the "Notes") pursuant to a Senior Note Indenture dated as
of December 1, 1997, by and between the Company and The Chase Manhattan Bank, as
trustee (the "Trustee"), as heretofore supplemented and as further supplemented
by the Second Supplemental Indenture dated as of __________ __, 199_
(collectively, the "Indenture"); and (ii) the purchase by you of the Notes
pursuant to the terms of an Underwriting Agreement dated __, 1998, among the
Company and the underwriters named in Schedule I thereto (the "Underwriters")
for whom you are acting as Representatives (the "Underwriting Agreement"). This
opinion is being delivered to you as Representatives pursuant to Section 5(c)(2)
thereof.
All capitalized terms not otherwise defined herein shall have
the meanings set forth in the Underwriting Agreement.
In rendering the opinions expressed below, we have examined
the registration statement on Form S-3 (Nos. 333-40629, 333-40629-01,
333-40629-02 and 333-40629-03) pertaining to the Notes (the "Registration
Statement") filed under the Securities Act of 1933, as amended (the "Act"), and
1
<PAGE>
the prospectus dated December 2, 1997 as supplemented by a final prospectus
supplement dated __________, 199_ (the "Final Supplemented Prospectus"), which
pursuant to Form S-3 incorporates by reference the Annual Report on Form 10-K of
the Company for the fiscal year ended _____________, 199_, 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
(the "Exchange Act").
In addition, we have examined, and have relied as to matters
of fact upon, the documents delivered to you at the closing (except the
certificates representing the Notes, of which we have examined a specimen), and
we have made such other and further investigations as we deemed necessary 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.
The Indenture and the Underwriting Agreement are herein
referred to collectively as the "Agreements".
Based upon the foregoing, and subject to the qualifications
and limitations stated herein, we are of the opinion, relying as to matters of
Alabama law upon the opinion dated the date hereof rendered to you by Balch &
Bingham LLP and relying as to matters of New York law upon the opinion dated the
date hereof rendered to you by Dewey Ballantine LLP, that:
1. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Alabama and has due
corporate authority to carry on the public utility business in which it is
engaged, to own and operate the properties used by it in such business and to
enter into and perform its obligations under the Agreements and the Notes.
2. The execution, delivery and performance by the Company of the
Underwriting Agreement have been duly authorized by all necessary corporate
action, and the Underwriting Agreement has been duly executed and delivered by
the Company.
3. All orders, consents or other authorizations or approvals of the
Alabama Public Service Commission and the Commission legally required for the
issuance and sale of the Notes have been obtained; such orders are sufficient
for the issuance and sale of the Notes; the issuance and sale of the Notes
conform in all material respects with the terms of such orders; and no other
order, consent or other authorization or approval of any Alabama or United
States 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
2
<PAGE>
we express no opinion) is legally required for the issuance and sale of the
Notes in accordance with the terms of the Underwriting Agreement.
4. The Indenture has been duly authorized, executed and delivered by
the Company and, assuming the due authorization, execution and delivery thereof
by the Trustee, constitutes a valid and legally binding instrument of the
Company, enforceable against the Company in accordance with its terms, subject
to the qualifications that the enforceability of the Company's obligations under
the Indenture may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally and by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law); and the
Indenture conforms as to legal matters in all material respects to the
description thereof in the Final Supplemented Prospectus.
5. The Notes have been duly authorized and executed by the Company and,
when authenticated by the Trustee in the manner provided in the Indenture and
delivered to and paid for by the Underwriters pursuant to the Underwriting
Agreement, will constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, subject to the
qualifications that the enforceability of the Company's obligations under the
Notes may be limited by bankruptcy, insolvency, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally and by
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law); and the Notes conform as to
legal matters in all material respects to the description thereof in the Final
Supplemented Prospectus.
6. The Indenture has been duly qualified under the Trust Indenture Act
of 1939, as amended.
We have not independently verified the accuracy, completeness
or fairness of the statements made or included in the Registration Statement,
the Final Supplemented Prospectus or the Exchange Act Documents and take no
responsibility therefor, except as and to the extent set forth in paragraphs 4
and 5 above. In the course of the preparation by the Company of the Registration
Statement, the Final Supplemented Prospectus and the Exchange Act Documents, we
participated in conferences with certain officers and employees of the Company,
with other counsel for the Company, with representatives of Arthur Andersen LLP
and with your counsel. Based upon our examination of the Registration Statement,
the Final Supplemented Prospectus and the Exchange Act Documents, our
investigations made in connection with the preparation of the Registration
Statement, the Final Supplemented Prospectus and the Exchange Act Documents and
our participation in the conferences referred to above, (i) we are of the
opinion that the Registration Statement, as of its effective date, and the Final
Supplemented Prospectus, as of _______________, complied as to form in all
material respects with the requirements of the 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
3
<PAGE>
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 Statement, the Final Supplemented Prospectus or the Exchange Act
Documents, and (ii) nothing came to our attention which gives us reason to
believe that the Registration Statement, as of its effective date (including the
Exchange Act Documents on file with the Commission as of such date), 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 Final Supplemented Prospectus (including the
Exchange Act Documents) contains any untrue statement of a material fact or
omits to state a 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 Statement, the Final
Supplemented Prospectus or the Exchange Act Documents and with respect to
information set forth in the Final Supplemented Prospectus under the caption
"Description of the Series B Senior Notes - Book-Entry Only Issuance - The
Depository Trust Company."
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 and, to the extent set forth
herein, the laws of the States of Alabama and New York.
This opinion is rendered to you in connection with the
above-described transaction. This opinion may not be relied upon by you for any
other purpose, or relied upon by or furnished to any other person without our
prior written consent.
Yours very truly,
TROUTMAN SANDERS LLP
4
<PAGE>
Schedule III
[Letterhead of Cravath, Swaine & Moore]
__________ __, 199_
Morgan Stanley & Co. Incorporated
Credit Suisse First Boston Corporation
A.G. Edwards & Sons, Inc.
PaineWebber Incorporated
Prudential Securities Incorporated
Smith Barney Inc.
Edward D. Jones & Co., L.P.
As Representatives of the Several Underwriters
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Alabama Power Company
600 North 18th Street
Birmingham, Alabama 35291
Alabama Power Company
Series B __ % Senior Quarterly Interest Notes due December 31, 2047
Dear Sirs:
We have acted as counsel to The Chase Manhattan Bank (the
"Bank") in connection with (a) the Senior Note Indenture, dated as of December
1, 1997, as heretofore supplemented (the "Original Indenture"), between Alabama
Power Company (the "Company") and the Bank, as Trustee, and (b) the Second
Supplemental Indenture dated as of ___________ (together with the Original
Indenture, herein called the "Indenture"), between the Company and the Bank, as
Trustee.
In that connection, we have examined originals, or copies
certified or otherwise identified to our satisfaction, of such documents,
records and other instruments as we have deemed necessary or appropriate for the
purpose of this opinion, including copies of the Indenture and certain
resolutions adopted by the Board of Directors of the Bank.
Based upon the foregoing, we are of the opinion that:
1
<PAGE>
i) the Bank has been duly incorporated and is validly existing as a
banking corporation in good standing under the laws of the State of New York;
ii) the Bank has the corporate trust power and authority to execute,
deliver and perform its duties under the Indenture, has duly executed and
delivered the Indenture, and, insofar as the laws governing the trust powers of
the Bank are concerned and assuming due authorization, execution and delivery
thereof by the Company, the Indenture constitutes a legal, valid and binding
agreement of the Bank, enforceable against the Bank in accordance with its terms
subject to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other laws affecting creditors' rights generally
from time to time in effect and to general principles of equity (including,
without limitation, concepts of materiality, reasonableness, good faith and fair
dealing), regardless of whether considered in a proceeding in equity or at law);
iii) the execution, delivery and performance by the Bank of the
Indenture does not conflict with or constitute a breach of the charter or bylaws
of the Bank; and
iv) no approval, authorization or other action by, or filing with, any
governmental authority of the United States of America or the State of New York
having jurisdiction over the trust powers of the Bank is required in connection
with the execution and delivery by the Bank of the Indenture or the performance
by the Bank of its duties thereunder, except such as have been obtained, taken
or made.
We are admitted to practice only in the State of New York, and
we express no opinion as to matters governed by any laws other than the laws of
the State of New York and the Federal law of the United States of America. We
are furnishing this opinion to you solely for your benefit. This opinion is not
to be relied upon by any other person or used, circulated, quoted or otherwise
referred to for any other purpose.
Very truly yours,
CRAVATH, SWAINE & MOORE
2
<PAGE>
Schedule IV
[Letterhead of DEWEY BALLANTINE LLP]
__________ __, 199_
Morgan Stanley & Co. Incorporated
Credit Suisse First Boston Corporation
A.G. Edwards & Sons, Inc.
PaineWebber Incorporated
Prudential Securities Incorporated
Smith Barney Inc.
Edward D. Jones & Co., L.P.
As Representatives of the Several Underwriters
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
ALABAMA POWER COMPANY
Series B __ % Senior Quarterly Interest Notes
due December 31, 2047
Ladies and Gentlemen:
We have represented you in connection with (i) the Company's
issuance of $____________ of its Series B __ % Senior Quarterly Interest Notes
(the "Notes") pursuant to a Senior Note Indenture dated as of December 1, 1997,
by and between the Company and The Chase Manhattan Bank, as trustee (the
"Trustee"), as heretofore supplemented and as further supplemented by the Second
Supplemental Indenture dated as of __________ __, 199_ (collectively, the
"Indenture"); and (ii) the purchase by you of the Notes pursuant to the terms of
an Underwriting Agreement dated ________________, 1998, among the Company and
the underwriters named in Schedule I thereto (the "Underwriters") for whom you
are acting as Representatives (the "Underwriting Agreement"). This opinion is
being delivered to you as Representatives pursuant to Section 5(c)(4) thereof.
All capitalized terms not otherwise defined herein shall have
the meanings set forth in the Underwriting Agreement.
1
In rendering the opinions expressed below, we have examined
the registration statement on Form S-3 (Nos. 333-40629, 333-40629-01,
333-40629-02 and 333-40629-03) pertaining to the Notes (the "Registration
Statement"), filed under the Securities Act of 1933, as amended (the "Act"), and
the prospectus dated December 2, 1997, as supplemented by a final prospectus
supplement dated _________, which pursuant to Form S-3 incorporates by reference
the Annual Report on Form 10-K of the Company for the fiscal year ended
________________, 199_, the Quarterly Reports on Form 10-Q of the Company for
the quarters ended _________ 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 (the "Exchange Act").
In addition, we have examined, and have relied as to matters
of fact upon, the documents delivered to you at the closing (except the Notes,
of which we have examined a specimen), and we have made such other and further
investigations as we deemed necessary 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.
The Indenture and the Underwriting Agreement are herein
referred to as the "Agreements".
Based upon the foregoing, and subject to the qualifications
and limitations stated herein, we are of the opinion, relying as aforesaid and
as to all matters covered hereby which are governed by or dependent upon the
laws of the State of Alabama upon the opinion of Balch & Bingham LLP dated the
date hereof and addressed to you, that:
1. The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Alabama 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 and to enter into and perform its obligations under the Agreements and
the Notes.
2. The execution, delivery and performance by the Company of
the Underwriting Agreement have been duly authorized by all necessary corporate
action, and the Underwriting Agreement has been duly executed and delivered by
the Company.
3. All orders, consents, or other authorizations or approvals
of the Alabama Public Service Commission and the Commission legally required for
the issuance and sale of the Notes have been obtained; such orders are
sufficient for the issuance and sale of the Notes; the issuance and sale of the
Notes conform in all material respects with the terms of such orders; and no
other order, consent or other authorization or approval of any Alabama or United
States 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
2
<PAGE>
we express no opinion) is legally required for the issuance and sale of the
Notes in accordance with the terms of the Underwriting Agreement.
4. The Indenture has been duly authorized, executed and
delivered by the Company and, assuming the due authorization, execution and
delivery thereof by the Trustee, constitutes a valid and legally binding
instrument of the Company, enforceable against the Company in accordance with
its terms, subject to the qualifications that the enforceability of the
Company's obligations under the Indenture may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally and by general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law); and the Indenture conforms as to legal matters in all
material respects to the description thereof in the Final Supplemented
Prospectus.
5. The Notes have been duly authorized and executed by the
Company and, when authenticated by the Trustee in the manner provided in the
Indenture and delivered to and paid for by the Underwriters pursuant to the
Underwriting Agreement, will constitute valid and binding obligations of the
Company enforceable against the Company in accordance with their terms, subject
to the qualifications that the enforceability of the Company's obligations under
the Notes may be limited by bankruptcy, insolvency, reorganization, moratorium
and other similar laws relating to or affecting creditors' rights generally and
by general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law); and the Notes conform as to
legal matters in all material respects to the description thereof in the Final
Supplemented Prospectus.
6. The Indenture has been duly qualified under the Trust Indenture Act
of 1939, as amended.
We have not independently verified the accuracy, completeness
or fairness of the statements made or included in the Registration Statement,
the Final Supplemented Prospectus or the Exchange Act Documents and take no
responsibility therefor, except as and to the extent set forth in paragraphs 4
and 5 above. In the course of the preparation by the Company of the Registration
Statement, the Final Supplemented 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 to the Company.
Based upon our examination of the Registration Statement, the Final Supplemented
Prospectus and the Exchange Act Documents, our investigations made in connection
with the preparation of the Registration Statement and the Final Supplemented
Prospectus and our participation in the conferences referred to above, (i) we
are of the opinion that the Registration Statement, as of its effective date,
and the Final Supplemented Prospectus, as of ___________, complied as to form in
all material respects with the requirements of the Act and the applicable rules
3
<PAGE>
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 Statement, the Final Supplemented Prospectus or
the Exchange Act Documents, and (ii) nothing came to our attention which gives
us reason to believe that the Registration Statement, as of its effective date
(including the Exchange Act Documents on file with the Commission as of such
date), 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 Final Supplemented Prospectus
(including the Exchange Act Documents) contains any untrue statement of a
material fact or omits to state a 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 Statement, the Final
Supplemented Prospectus or the Exchange Act Documents and with respect to
information set forth in the Final Supplemented Prospectus under the caption
"Description of the Series B Senior Notes - Book-Entry Only Issuance - The
Depository Trust Company."
We are members of the State Bar 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 law of the State of Alabama.
This opinion is rendered solely to you in connection with the
above matter. This opinion may not be relied upon by you for any other purpose
or relied upon by or furnished to any other person without our prior written
consent except that Balch & Bingham LLP and Troutman Sanders LLP may rely on
this opinion in giving their opinions pursuant to Section 5(c) of the
Underwriting Agreement, insofar as such opinions relate to matters of New York
law, and Balch & Bingham LLP may rely on this opinion in giving its opinion
pursuant to Sections 102, 302 and 904 of the Indenture, insofar as such opinion
relates to matters of New York law.
Very truly yours,
DEWEY BALLANTINE LLP
Exhibit 4.2
ALABAMA POWER COMPANY
TO
THE CHASE MANHATTTAN BANK,
TRUSTEE.
SECOND SUPPLEMENTAL INDENTURE
DATED AS OF FEBRUARY 26, 1998
$200,000,000
SERIES B 7% SENIOR QUARTERLY INTEREST NOTES
DUE DECEMBER 31, 2047
<PAGE>
TABLE OF CONTENTS1
<TABLE>
<CAPTION>
PAGE
<S> <C>
ARTICLE 1..............................................................................1
SECTION 101. Establishment.............................................................2
SECTION 102. Definitions...............................................................3
SECTION 103. Payment of Principal and Interest.........................................3
SECTION 104. Denominations.............................................................3
SECTION 105. Global Securities.........................................................3
SECTION 106. Transfer..................................................................4
SECTION 107. Redemption................................................................4
SECTION 108. Limitation on Sale and Lease-Back Transactions............................5
ARTICLE 2..............................................................................5
SECTION 201. Recitals by Company.......................................................5
SECTION 202. Ratification and Incorporation of Original Indenture......................5
SECTION 203. Executed in Counterparts..................................................5
1This Table of Contents does not constitute part of the Indenture or have
any bearing upon the interpretation of any of its terms and provisions.
</TABLE>
i
<PAGE>
THIS SECOND SUPPLEMENTAL INDENTURE is made as of the 26th day
of February, 1998, by and between ALABAMA POWER COMPANY, an Alabama corporation,
600 North 18th Street, Birmingham, Alabama 35291 (the "Company"), and THE CHASE
MANHATTAN BANK, a New York banking corporation, 450 West 33rd Street, New York,
New York 10001 (the "Trustee").
W I T N E S S E T H:
WHEREAS, the Company has heretofore entered into a Senior Note
Indenture, dated as of December 1, 1997 (the "Original Indenture"), with The
Chase Manhattan Bank, as supplemented by a First Supplemental Indenture, dated
as of December 12, 1997 (the "First Supplemental Indenture"), with The Chase
Manhattan Bank;
WHEREAS, the Original Indenture is incorporated herein by this
reference and the Original Indenture, as supplemented by the First Supplemental
Indenture and this Second Supplemental Indenture, is herein called the
"Indenture";
WHEREAS, under the Original Indenture, a new series of Senior
Notes may at any time be established by the Board of Directors of the Company in
accordance with the provisions of the Original Indenture and the terms of such
series may be described by a supplemental indenture executed by the Company and
the Trustee;
WHEREAS, the Company proposes to create under the Indenture
a new series of Senior Notes;
WHEREAS, additional Senior Notes of other series hereafter
established, except as may be limited in the Original Indenture as at the time
supplemented and modified, may be issued from time to time pursuant to the
Indenture as at the time supplemented and modified; and
WHEREAS, all conditions necessary to authorize the execution,
delivery and recording of this Second Supplemental Indenture and to make it a
valid and binding obligation of the Company have been done or performed.
NOW, THEREFORE, in consideration of the agreements and
obligations set forth herein and for other good and valuable consideration, the
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:
ARTICLE 1
Series B Senior Notes
SECTION 101. Establishment. There is hereby established a new series of
Senior Notes to be issued under the Indenture, to be designated as the Company's
Series B 7% Senior Quarterly Interest Notes due December 31, 2047 (the "Series B
Notes").
<PAGE>
There are to be authenticated and delivered $200,000,000 principal
amount of Series B Notes, and no further Series B Notes shall be authenticated
and delivered except as provided by Sections 203, 303, 304, 907 or 1107 of the
Original Indenture. The Series B Notes shall be issued in definitive fully
registered form.
The Series B Notes shall be issued in the form of one Global Security
in substantially the form set out in Exhibit A hereto. The Depositary with
respect to the Series B Notes shall be The Depository Trust Company.
The form of the Trustee's Certificate of Authentication for the Series
B Notes shall be in substantially the form set forth in Exhibit B hereto.
Each Series B Note shall be dated the date of authentication thereof
and shall bear interest from the date of original issuance thereof or from the
most recent Interest Payment Date to which interest has been paid or duly
provided for.
SECTION 102. Definitions. The following defined terms used herein
shall, unless the context otherwise requires, have the meanings specified below.
Capitalized terms used herein for which no definition is provided herein shall
have the meanings set forth in the Original Indenture.
"Attributable Debt" means in respect of a Sale and Lease-Back
Transaction, as at the time of determination, the present value (discounted at
the interest rate borne by the Series B Notes) of the total obligations of the
lessee for rental payments during the remaining term of the lease included in
such Sale and Lease-Back Transaction (including any period for which such lease
has been extended).
"Consolidated Net Tangible Assets" means the total of all assets
(including revaluations thereof as a result of commercial appraisals, price
level restatement or otherwise) appearing on a consolidated balance sheet of the
Company, net of applicable reserves and deductions, but excluding goodwill,
trade names, trademarks, patents, unamortized debt discount and all other like
intangible assets (which term shall not be construed to include such
revaluations), less the aggregate of the consolidated current liabilities of the
Company appearing on such balance sheet.
"Interest Payment Dates" means March 31, June 30, September 30, and
December 31 of each year.
"Original Issue Date" means February 26, 1998.
"Regular Record Date" means, with respect to each Interest Payment
Date, the close of business on the 15th calendar day preceding such Interest
Payment Date.
"Sale and Lease-Back Transaction" shall have the meaning set forth in
Section 108 of this Second Supplemental Indenture.
2
<PAGE>
"Stated Maturity" means December 31, 2047.
SECTION 103. Payment of Principal and Interest. The unpaid principal
amount of the Series B Notes shall bear interest at the rate of 7% per annum
until paid or duly provided for. Interest shall be paid quarterly in arrears on
each Interest Payment Date to the Person in whose name the Series B Notes are
registered on the Regular Record Date for such Interest Payment Date, provided
that interest payable at the Stated Maturity of principal or on a Redemption
Date as provided herein will be paid to the Person to whom principal is payable.
Any such interest that is not so punctually paid or duly provided for will
forthwith cease to be payable to the Holders on such Regular Record Date and may
either be paid to the Person or Persons in whose name the Series B Notes are
registered at the close of business on a Special Record Date for the payment of
such defaulted interest to be fixed by the Trustee, notice whereof shall be
given to Holders of the Series B Notes not less than ten (10) days prior to such
Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange, if any, on which
the Series B Notes shall be listed, and upon such notice as may be required by
any such exchange, all as more fully provided in the Original Indenture.
Payments of interest on the Series B Notes will include interest
accrued to but excluding the respective Interest Payment Dates. Interest
payments for the Series B Notes shall be computed and paid on the basis of a
360-day year of twelve 30-day months. In the event that any date on which
interest is payable on the Series B Notes is not a Business Day, then a payment
of the interest payable on such date will be made on the next succeeding day
that is a Business Day, except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on the date the payment was originally payable.
Payment of the principal and interest due at the Stated Maturity or
earlier redemption of the Series B Notes shall be made upon surrender of the
Series B Notes at the Corporate Trust Office of the Trustee, in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. Payments of interest (including
interest on any Interest Payment Date) will be made, subject to such surrender
where applicable, at the option of the Company, (i) by check mailed to the
address of the Person entitled thereto as such address shall appear in the
Security Register or (ii) by wire transfer at such place and to such account at
a banking institution in the United States as may be designated in writing to
the Trustee at least sixteen (16) days prior to the date for payment by the
Person entitled thereto.
SECTION 104. Denominations. The Series B Notes may be issued in the
denominations of $25, or any integral multiple thereof.
SECTION 105. Global Securities. The Series B Notes will be issued in
the form of one or more Global Securities registered in the name of the
Depositary (which shall be The Depository Trust Company) or its nominee. Except
under the limited circumstances described below, Series B Notes represented by
the Global Security will not be exchangeable for, and will not otherwise be
issuable as, Series B Notes in definitive form. The Global Securities described
above may not be transferred except by the Depositary to a nominee of the
3
<PAGE>
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or to a successor Depositary or its nominee.
Owners of beneficial interests in such a Global Security will not be
considered the Holders thereof for any purpose under the Indenture, and no
Global Security representing a Series B Note shall be exchangeable, except for
another Global Security of like denomination and tenor to be registered in the
name of the Depositary or its nominee or to a successor Depositary or its
nominee. The rights of Holders of such Global Security shall be exercised only
through the Depositary.
A Global Security shall be exchangeable for Series B Notes registered
in the names of persons other than the Depositary or its nominee only if (i) the
Depositary notifies the Company that it is unwilling or unable to continue as a
Depositary for such Global Security and no successor Depositary shall have been
appointed by the Company, or if at any time the Depositary ceases to be a
clearing agency registered under the Securities Exchange Act of 1934, as
amended, at a time when the Depositary is required to be so registered to act as
such Depositary and no successor Depositary shall have been appointed by the
Company, in each case within 90 days after the Company receives such notice or
becomes aware of such cessation, (ii) the Company in its sole discretion
determines that such Global Security shall be so exchangeable, or (iii) there
shall have occurred an Event of Default with respect to the Series B Notes. Any
Global Security that is exchangeable pursuant to the preceding sentence shall be
exchangeable for Series B Notes registered in such names as the Depositary shall
direct.
SECTION 106. Transfer. No service charge will be made for any transfer
or exchange of Series B Notes, but payment will be required of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
therewith.
The Company shall not be required (a) to issue, transfer or exchange
any Series B Notes during a period beginning at the opening of business fifteen
(15) days before the day of the mailing of a notice identifying the serial
numbers of the Series B Notes to be called for redemption, and ending at the
close of business on the day of the mailing, or (b) to transfer or exchange any
Series B Notes theretofore selected for redemption in whole or in part, except
the unredeemed portion of any Series B Note redeemed in part.
SECTION 107. Redemption. The Series B Notes shall be subject to
redemption at the option of the Company, in whole or in part, without premium or
penalty, at any time or from time to time on or after February 26, 2003, at a
Redemption Price equal to 100% of the principal amount to be redeemed plus
accrued but unpaid interest to the Redemption Date.
In the event of redemption of the Series B Notes in part only, a new
Series B Note or Notes for the unredeemed portion will be issued in the name or
names of the Holders thereof upon the surrender thereof.
The Series B Notes will not have a sinking fund.
Notice of redemption shall be given as provided in Section 1104 of the
Original Indenture.
<PAGE>
4
Any redemption of less than all of the Series B Notes shall, with
respect to the principal thereof, be divisible by $25.
SECTION 108. Limitation on Sale and Lease-Back Transactions. So long as
any Series B Notes remain Outstanding, the Company shall not enter into any
arrangement with any Person providing for the leasing by the Company of any
assets which have been or are to be sold or transferred by the Company to such
Person (a "Sale and Lease-Back Transaction") unless: (i) such transaction
involves a lease for a temporary period not to exceed three years; (ii) such
transaction is between the Company and an Affiliate of the Company; (iii) such
transaction is entered into within 60 days after the initial acquisition by the
Company of the assets or property subject to such transaction; (iv) after giving
effect thereto, the aggregate amount of all Attributable Debt with respect to
all such Sale and Lease-Back Transactions does not exceed 10% of Consolidated
Net Tangible Assets; or (v) within the twelve months preceding the sale or
transfer or the twelve months following the sale or transfer, the Company
applies, in the case of a sale or transfer for cash, an amount equal to the net
proceeds thereof and, in the case of a sale or transfer otherwise than for cash,
an amount equal to the fair value of the assets so leased at the time of
entering into such arrangement (as determined by the Board of Directors), (a) to
the retirement of indebtedness for money borrowed, incurred or assumed by the
Company which by its terms matures at, or is extendible or renewable at the
option of the obligor to, a date more than twelve months after the date of
incurring, assuming or guaranteeing such debt or (b) to investment in any assets
of the Company.
This Section 108 is expressly being included in the Original Indenture
by this Second Supplemental Indenture solely for the benefit of the Holders of
the Series B Notes.
ARTICLE 2
Miscellaneous Provisions
SECTION 201. Recitals by Company. The recitals in this Second
Supplemental Indenture are made by the Company only and not by the Trustee, and
all of the provisions contained in the Original Indenture in respect of the
rights, privileges, immunities, powers and duties of the Trustee shall be
applicable in respect of Series B Notes and of this Second Supplemental
Indenture as fully and with like effect as if set forth herein in full.
SECTION 202. Ratification and Incorporation of Original Indenture. As
heretofore supplemented by the First Supplemental Indenture and as supplemented
hereby, the Original Indenture is in all respects ratified and confirmed, and
the Original Indenture, the First Supplemental Indenture and this Second
Supplemental Indenture shall be read, taken and construed as one and the same
instrument.
5
<PAGE>
SECTION 203. Executed in Counterparts. This Second Supplemental
Indenture may be simultaneously executed in several counterparts, each of which
shall be deemed to be an original, and such counterparts shall together
constitute but one and the same instrument.
6
<PAGE>
IN WITNESS WHEREOF, each party hereto has caused this
instrument to be signed in its name and behalf by its duly authorized officers,
all as of the day and year first above written.
ATTEST: ALABAMA POWER COMPANY
By: __________________________ By:________________________________
Assistant Secretary Vice President, Secretary and Comptroller
ATTEST: THE CHASE MANHATTAN BANK, as Trustee
By: By:________________________________
Senior Trust Officer
<PAGE>
EXHIBIT A
FORM OF SERIES B NOTE
<PAGE>
NO. 1 CUSIP NO. 010392637
ALABAMA POWER COMPANY
SERIES B 7% SENIOR QUARTERLY INTEREST NOTE
DUE DECEMBER 31, 2047
Principal Amount: $_____________
Regular Record Date: 15th calendar day prior to Interest Payment Date
Original Issue Date: February 26, 1998
Stated Maturity: December 31, 2047
Interest Payment Dates: March 31, June 30, September 30 and December 31
Interest Rate: 7% per annum
Authorized Denomination: $25
Initial Redemption Date: February 26, 2003
Alabama Power Company, an Alabama corporation (the "Company", which
term includes any successor corporation under the Indenture referred to on the
reverse hereof), for value received, hereby promises to pay to
_______________________________________________, or registered assigns, the
principal sum of _________ DOLLARS ($__________) on the Stated Maturity shown
above (or upon earlier redemption), and to pay interest thereon from the
Original Issue Date shown above, or from the most recent Interest Payment Date
to which interest has been paid or duly provided for, quarterly in arrears on
each Interest Payment Date as specified above, commencing on the Interest
Payment Date next succeeding the Original Issue Date shown above and on the
Stated Maturity (or upon earlier redemption) at the rate per annum shown above
until the principal hereof is paid or made available for payment and on any
overdue principal and on any overdue installment of interest. The interest so
payable, and punctually paid or duly provided for, on any Interest Payment Date
(other than an Interest Payment Date that is the Stated Maturity or on a
Redemption Date) will, as provided in such Indenture, be paid to the Person in
whose name this Note (the "Note") is registered at the close of business on the
Regular Record Date as specified above next preceding such Interest Payment
Date, provided that any interest payable at Stated Maturity or on any Redemption
Date will be paid to the Person to whom principal is payable. Except as
otherwise provided in the Indenture, any such interest not so punctually paid or
duly provided for will forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose name this Note
is registered at the close of business on a Special Record Date for the payment
<PAGE>
of such defaulted interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Notes of this series not less than 10 days prior to such
Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange, if any, on which
the Notes of this series shall be listed, and upon such notice as may be
required by any such exchange, all as more fully provided in the Indenture.
Payments of interest on this Note will include interest accrued to but
excluding the respective Interest Payment Dates. Interest payments for this Note
shall be computed and paid on the basis of a 360-day year of twelve 30-day
months. In the event that any date on which interest is payable on this Note is
not a Business Day, then payment of the interest payable on such date will be
made on the next succeeding day that is a Business Day, except that, if such
Business Day is in the next succeeding calendar year, payment shall be made on
the immediately preceding Business Day, in each case with the same force and
effect as if made on the date the payment was originally payable. A "Business
Day" shall mean any day other than a Saturday or a Sunday or a day on which
banking institutions in New York City are authorized or required by law or
executive order to remain closed or a day on which the Corporate Trust Office of
the Trustee is closed for business.
Payment of the principal of and interest due at the Stated Maturity or
earlier redemption of the Series B Notes shall be made upon surrender of the
Series B Notes at the Corporate Trust Office of the Trustee, in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. Payment of interest (including
interest on an Interest Payment Date) will be made, subject to such surrender
where applicable, at the option of the Company, (i) by check mailed to the
address of the Person entitled thereto as such address shall appear in the
Security Register or (ii) by wire transfer at such place and to such account at
a banking institution in the United States as may be designated in writing to
the Trustee at least 16 days prior to the date for payment by the Person
entitled thereto.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET
FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES
HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.
Unless the certificate of authentication hereon has been executed by
the Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
2
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated:
ALABAMA POWER COMPANY
By:_____________________________________________
Art P. Beattie
Vice President, Secretary and Comptroller
Attest:
____________________
Assistant Secretary
{Seal of ALABAMA POWER COMPANY appears here}
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Senior Notes referred to in the within-mentioned
Indenture.
THE CHASE MANHATTAN BANK,
as Trustee
By:________________________________________
Authorized Officer
<PAGE>
(Reverse Side of Note)
This Note is one of a duly authorized issue of Senior Notes of the
Company (the "Notes"), issued and issuable in one or more series under a Senior
Note Indenture, dated as of December 1, 1997, as supplemented (the "Indenture"),
between the Company and The Chase Manhattan Bank, Trustee (the "Trustee," which
term includes any successor trustee under the Indenture), to which Indenture and
all indentures incidental thereto reference is hereby made for a statement of
the respective rights, limitation of rights, duties and immunities thereunder of
the Company, the Trustee and the Holders of the Notes issued thereunder and of
the terms upon which said Notes are, and are to be, authenticated and delivered.
This Note is one of the series designated on the face hereof as Series B 7%
Senior Quarterly Interest Notes due December 31, 2047 (the "Series B Notes") in
the aggregate principal amount of up to $200,000,000. Capitalized terms used
herein for which no definition is provided herein shall have the meanings set
forth in the Indenture.
The Company shall have the right, subject to the terms and conditions
of the Indenture, to redeem this Note at any time on or after February 26, 2003
at the option of the Company, without premium or penalty, in whole or in part,
at a Redemption Price equal to 100% of the principal amount to be redeemed plus
accrued but unpaid interest to the Redemption Date.
In the event of redemption of this Note in part only, a new Note or
Notes of this series for the unredeemed portion hereof will be issued in the
name of the Holder hereof upon the surrender hereof. The Notes will not have a
sinking fund.
If an Event of Default with respect to the Notes of this series shall
occur and be continuing, the principal of the Notes of this series may be
declared due and payable in the manner, with the effect and subject to the
conditions provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Notes of each series to be affected
under the Indenture at any time by the Company and the Trustee with the consent
of the Holders of not less than a majority in principal amount of the Notes at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Notes of each series at the time Outstanding, on behalf of the Holders of
all Notes of such series, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Note shall
be conclusive and binding upon such Holder and upon all future Holders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof, whether or not notation of such consent or
waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency, herein prescribed.
<PAGE>
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Note is registrable in the Security Register,
upon surrender of this Note for registration of transfer at the office or agency
of the Company for such purpose, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar and duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Notes of this series, of
authorized denominations and of like tenor and for the same aggregate principal
amount, will be issued to the designated transferee or transferees. No service
charge shall be made for any such registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
The Notes of this series are issuable only in registered form without
coupons in denominations of $25 and any integral multiple thereof. As provided
in the Indenture and subject to certain limitations therein set forth, Notes of
this series are exchangeable for a like aggregate principal amount of Notes of
this series of a different authorized denomination, as requested by the Holder
surrendering the same upon surrender of the Note or Notes to be exchanged at the
office or agency of the Company.
This Note shall be governed by, and construed in accordance with, the
internal laws of the State of New York.
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
<PAGE>
TEN COM- as tenants in UNIF GIFT MIN ACT- _______ Custodian ________
common (Cust) (Minor)
TEN ENT- as tenants by the
entireties under Uniform Gifts to
JT TEN- as joint tenants Minors Act
with right of
survivorship and ________________________
not as tenants (State)
in common
Additional abbreviations may also be used
though not on the above list.
FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto
______________________________________________________________________________
(please insert Social Security or other identifying number of assignee)
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE
OF ASSIGNEE
_______________________________________________________________________________
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing
______________________________________________________________________________
agent to transfer said Note on the books of the Company, with full power of
substitution in the premises.
Dated:_____________________ ___________________________________
___________________________________
NOTICE: The signature to this
assignment must correspond with the
name as written upon the face of the
within instrument in every
particular without alteration or
enlargement, or any change whatever.
<PAGE>
EXHIBIT B
CERTIFICATE OF AUTHENTICATION
This is one of the Senior Notes referred to in the within-mentioned
Indenture.
THE CHASE MANHATTAN BANK,
as Trustee
By: ____________________________________
Authorized Officer
Exhibit 12.1
2/23/98
ALABAMA POWER COMPANY
Computation of ratio of earnings to fixed charges for the
the five years ended December 31, 1997
and the twelve months ended January 31, 1998
<TABLE>
<CAPTION>
Twelve
Months
Ended
Year ended December 31, January 31,
========================================================
1993 1994 1995 1996 1997 1998
--------------------------Thousands of Dollars-------------------------
EARNINGS AS DEFINED IN ITEM 503 OF REGULATION S-K:
<S> <C> <C> <C> <C> <C> <C>
Income Before Interest Charges $608,050 $594,669 $628,304 $627,627 $645,449 $645,736
Federal and state income taxes 167,021 242,569 186,856 191,167 222,956 233,123
Deferred income taxes, net 34,467 (32,536) 32,047 16,715 (12,879) (25,215)
Deferred investment tax credits (2,106) (4) (75) - - -
AFUDC - Debt funds 3,016 3,590 7,109 6,517 4,855 4,759
--------- --------- --------- --------- --------- ---------
Earnings as defined $810,448 $808,288 $854,241 $842,026 $860,381 $858,403
========= ========= ========= ========= ========= =========
FIXED CHARGES AS DEFINED IN ITEM 503 OF REGULATION S-K:
Interest on long-term debt $186,779 $180,182 $183,199 $171,689 $169,536 $169,984
Interest on interim obligations 3,760 5,939 16,917 20,617 22,787 23,242
Amort of debt disc, premium and expense, net 8,999 9,655 20,270 9,520 9,657 9,681
Other interest charges 35,475 19,909 27,064 34,227 57,799 60,792
--------- --------- --------- --------- --------- ---------
Fixed charges as defined $235,013 $215,685 $247,450 $236,053 $259,779 $263,699
========= ========= ========= ========= ========= =========
RATIO OF EARNINGS TO FIXED CHARGES 3.45 3.75 3.45 3.57 3.31 3.26
</TABLE>
Note: The above figures have been adjusted to give effect to Alabama Power
Company's 50% ownership of Southern Electric Generating Company.
Exhibit 12.2
2/23/98
ALABAMA POWER COMPANY
Computation of ratio of earnings to fixed charges plus preferred
dividend requirements for the five years ended December 31, 1997
and the twelve months ended January 31, 1998
<TABLE>
<CAPTION>
Twelve
Months
Ended
Year ended December 31, January 31,
===========================================================
1993 1994 1995 1996 1997 1998
-------------------------Thousands of Dollars---------------------------
EARNINGS AS DEFINED IN ITEM 503 OF REGULATION S-K:
<S> <C> <C> <C> <C> <C> <C>
Income Before Interest Charges $608,050 $594,669 $628,304 $627,627 $645,449 $645,736
Federal and state income taxes 167,021 242,569 186,856 191,167 222,956 233,123
Deferred income taxes, net 34,467 (32,536) 32,047 16,715 (12,879) (25,215)
Deferred investment tax credits (2,106) (4) (75) - - -
AFUDC - Debt funds 3,016 3,590 7,109 6,517 4,855 4,759
--------- --------- --------- --------- --------- ---------
Earnings as defined $810,448 $808,288 $854,241 $842,026 $860,381 $858,403
========= ========= ========= ========= ========= =========
FIXED CHARGES AS DEFINED IN ITEM 503 OF REGULATION S-K:
Interest on long-term debt $186,779 $180,182 $183,199 $171,689 $169,536 $169,984
Interest on interim obligations 3,760 5,939 16,917 20,617 22,787 23,242
Amort of debt disc, premium and expense, net 8,999 9,655 20,270 9,520 9,657 9,681
Other interest charges 35,475 19,909 27,064 34,227 57,799 60,792
--------- --------- --------- --------- --------- ---------
Fixed charges as defined 235,013 215,685 247,450 236,053 259,779 263,699
Tax deductible preferred dividends 1,830 1,605 1,605 1,605 1,589 1,559
--------- --------- --------- --------- --------- ---------
236,843 217,290 249,055 237,658 261,368 265,258
--------- --------- --------- --------- --------- ---------
Non-tax deductible preferred dividends 27,729 24,630 25,464 24,997 12,997 11,960
Ratio of net income before taxes to net income x 1.530 x 1.549 x 1.564 x 1.522 x 1.538 x 1.538
--------- --------- --------- --------- --------- ---------
Pref dividend requirements before income taxes 42,425 38,152 39,826 38,045 19,989 18,394
--------- --------- --------- --------- --------- ---------
Fixed charges plus pref dividend requirements $279,268 $255,442 $288,881 $275,703 $281,357 $283,652
========= ========= ========= ========= ========= =========
RATIO OF EARNINGS TO FIXED CHARGES PLUS
PREFERRED DIVIDEND REQUIREMENTS 2.90 3.16 2.96 3.05 3.06 3.03
</TABLE>
Note: The above figures have been adjusted to give effect to Alabama Power
Company's 50% ownership of Southern Electric Generating Company.
