Form U-13-60
Mutual and Subsidiary Service Companies
Revised February 7, 1980
ANNUAL REPORT
FOR THE PERIOD
Beginning January 1, 1997 and Ending December 31, 1997
------------------- ----------------------
TO THE
U.S. SECURITIES AND EXCHANGE COMMISSION
OF
Southern Nuclear Operating Company, Inc.
(Exact Name of Reporting Company)
A Subsidiary Service Company
("Mutual or "Subsidiary")
Date of Incorporation December 17, 1990
-----------------
If not Incorporated, Date of Organization -------------
State or Sovereign Power under which Incorporated
or Organized Delaware
--------
Building 40
Location of Principal Executive Office Inverness Center Parkway
of Reporting Company Birmingham, Alabama 35242
Name, title, and address of officer to whom
correspondence concerning this report should be addressed:
Building 40
Comptroller, Treasurer, Inverness Center Parkway
Kathleen S. King and Chief Financial Officer Birmingham, Alabama 35242
- ---------------- --------------------------- -------------------------
(Name) (Title) (Address)
Name of Principal Holding Company
Whose Subsidiaries are served by Reporting Company:
Southern Company
<PAGE>
1
INSTRUCTIONS FOR USE OF FORM U-13-60
1. Time of Filing
Rule 94 provides that on or before the first day of May in each
calendar year, each mutual service company and each subsidiary service
company as to which the Commission shall have made a favorable finding
pursuant to Rule 88, and every service company whose application for
approval or declaration pursuant to Rule 88 is pending shall file with
the Commission an annual report on Form U-13-60 and in accordance with
the Instructions for that form.
2. Number of Copies
Each annual report shall be filed in duplicate. The company should
prepare and retain at least one extra copy for itself in case
correspondence with reference to the report becomes necessary.
3. Period Covered by Report
The first report filed by any company shall cover the period from the
date the Uniform System of Accounts was required to be made effective
as to that company under Rules 82 and 93 to the end of that calendar
year. Subsequent reports should cover a calendar year.
4. Report Format
Reports shall be submitted on the forms prepared by the Commission. If
the space provided on any sheet of such form is inadequate, additional
sheets may be inserted of the same size as a sheet of the form or
folded to such size.
5. Money Amounts Displayed
All money amounts required to be shown in financial statements may be
expressed in whole dollars, in thousands of dollars or in hundred
thousands of dollars, as appropriate and subject to provisions of
Regulations S-X (210.3-01(b)).
6. Deficits Displayed
Deficits and other like entries shall be indicated by the use of either
brackets or a parenthesis with corresponding reference in footnotes
(Regulations S-X, 210.3-01(c)).
7. Major Amendments or Corrections
Any company desiring to amend or correct a major omission or error in a
report after it has been filed with the Commission shall submit an
amended report including only those pages, schedules, and entries that
are to be amended or corrected. A cover letter shall be submitted
requesting the Commission to incorporate the amended report changes and
shall be signed by a duly authorized officer of the company.
8. Definitions
Definitions contained in Instruction 01-8 to the Uniform System of
Accounts for Mutual Service Companies and Subsidiary Service Companies,
Public Utility Holding Company Act of 1935, as amended February 2,
1979, shall be applicable to words or terms used specifically within
this Form U-13-60.
9. Organization Chart
The service company shall submit with each annual report a copy of its
current organization chart.
10. Methods of Allocation
The service company shall submit with each annual report a listing of
the currently effective methods of allocation being used by the service
company and on file with the Securities and Exchange Commission
pursuant to the Public Utility Holding Company Act of 1935.
11. Annual Statement of Compensation for Use of Capital Billed
The service company shall submit with each annual report a copy of the
annual statement supplied to each associate company in support of the
amount of compensation for use of capital billed during the calendar
year.
<PAGE>
2
LISTING OF SCHEDULES AND ANALYSIS OF ACCOUNTS
- -------------------------------------------------------------------------------
Schedule or
Account Page
Description of Schedules and Accounts Number Number
- -------------------------------------------------------------------------------
COMPARATIVE BALANCE SHEET Schedule I 4-5
SERVICE COMPANY PROPERTY Schedule II 6-7
ACCUMULATED PROVISION FOR DEPRECIATION AND
AMORTIZATION OF SERVICE COMPANY PROPERTY Schedule III 8
INVESTMENTS Schedule IV 9
ACCOUNTS RECEIVABLE FROM ASSOCIATE
COMPANIES Schedule V 10
FUEL STOCK EXPENSES UNDISTRIBUTED Schedule VI 11
STORES EXPENSE UNDISTRIBUTED Schedule VII 12
MISCELLANEOUS CURRENT AND ACCRUED ASSETS Schedule VIII 13
MISCELLANEOUS DEFERRED DEBITS Schedule IX 14
RESEARCH, DEVELOPMENT, OR DEMONSTRATION
EXPENDITURES Schedule X 15
PROPRIETARY CAPITAL Schedule XI 16
LONG-TERM DEBT Schedule XII 17
CURRENT AND ACCRUED LIABILITIES Schedule XIII 18
NOTES TO FINANCIAL STATEMENTS Schedule XIV 19
COMPARATIVE INCOME STATEMENT Schedule XV 20
ANALYSIS OF BILLING - ASSOCIATE COMPANIES Account 457 21
ANALYSIS OF BILLING - NONASSOCIATE
COMPANIES Account 458 22
ANALYSIS OF CHARGES FOR SERVICE -
ASSOCIATE AND NONASSOCIATE COMPANIES Schedule XVI 23
SCHEDULE OF EXPENSE BY DEPARTMENT OR
SERVICE FUNCTION Schedule XVII 24
DEPARTMENTAL ANALYSIS OF SALARIES Account 920 25
OUTSIDE SERVICES EMPLOYED Account 923 26
EMPLOYEE PENSIONS AND BENEFITS Account 926 27
GENERAL ADVERTISING EXPENSES Account 930.1 28
MISCELLANEOUS GENERAL EXPENSES Account 930.2 29
RENTS Account 931 30
TAXES OTHER THAN INCOME TAXES Account 408 31
DONATIONS Account 426.1 32
OTHER DEDUCTIONS Account 426.5 33
- -------------------------------------------------------------------------------
<PAGE>
3
LISTING OF INSTRUCTIONAL FILING REQUIREMENTS
- -------------------------------------------------------------------------------
Schedule Page
Description of Schedules and Accounts Number Number
- -------------------------------------------------------------------------------
NOTES TO STATEMENT OF INCOME Schedule XVIII 34
FINANCIAL DATA SCHEDULE Schedule XIX 35
ORGANIZATION CHART 36
METHODS OF ALLOCATION 37
ANNUAL STATEMENT OF COMPENSATION FOR USE
OF CAPITAL BILLED 38
<PAGE>
<TABLE>
<CAPTION>
4
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
(Thousands of Dollars)
<S> <C>
- ---------------------------------------------------------------------------------------------------
SCHEDULE I - COMPARATIVE BALANCE SHEET
Give balance sheet of the Company as of December 31 of the current and prior
year.
- ---------------------------------------------------------------------------------------------------
ACCOUNT ASSETS AND OTHER DEBITS AS OF DECEMBER 31
CURRENT PRIOR
- ---------------------------------------------------------------------------------------------------
SERVICE COMPANY PROPERTY
101 Service company property (Schedule II) 11,555 12,431
107 Construction work in progress (Schedule II) - -
-------- --------
Total Property 11,555 12,431
-------- --------
108 Less accumulated provision for depreciation
and amortization of service company property (Schedule III) 8,922 9,003
-------- --------
Net Service Company Property 2,633 3,428
-------- --------
INVESTMENTS
123 Investments in associate companies (Schedule IV) - -
124 Other investments (Schedule IV) 1,604 1,789
-------- --------
Total Investments 1,604 1,789
-------- --------
CURRENT AND ACCRUED ASSETS
131 Cash 147 176
134 Special deposits - -
135 Working funds 107 30
136 Temporary cash investments (Schedule IV) 2,000 1,000
141 Notes receivable - -
143 Accounts receivable 52 611
144 Accumulated provision for uncollectible accounts - -
146 Accounts receivable from associate companies (Schedule V) 102,706 81,138
152 Fuel stock expenses undistributed (Schedule VI) - -
154 Materials and supplies - -
163 Stores expense undistributed (Schedule VII) - -
165 Prepayments 3,967 1,425
174 Miscellaneous current and accrued assets (Schedule VIII) - -
-------- --------
Total Current and Accrued Assets 108,979 84,380
-------- --------
DEFERRED DEBITS
181 Unamortized debt expense - -
184 Clearing accounts - -
186 Miscellaneous deferred debits (Schedule IX) 296 264
188 Research, development, or demonstration
expenditures (Schedule X) - -
190 Accumulated deferred income taxes 24,437 23,693
------- --------
Total Deferred Debits 24,733 23,957
------- --------
TOTAL ASSETS AND OTHER DEBITS 137,949 113,554
------- --------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
5
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
(Thousands of Dollars)
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------------------
SCHEDULE I - COMPARATIVE BALANCE SHEET
- ---------------------------------------------------------------------------------------------------------------
ACCOUNT LIABILITIES AND PROPRIETARY CAPITAL AS OF DECEMBER 31
CURRENT PRIOR
- ---------------------------------------------------------------------------------------------------------------
PROPRIETARY CAPITAL
201 Common stock issued (Schedule XI) 10 10
211 Miscellaneous paid-in-capital (Schedule XI) 1,852 1,859
215 Appropriated retained earnings (Schedule XI) - -
216 Unappropriated retained earnings (Schedule XI) - -
-------- --------
Total Proprietary Capital 1,862 1,869
-------- --------
LONG-TERM DEBT
223 Advances from associate companies (Schedule XII) 5,000 5,000
224 Other long-term debt (Schedule XII) - -
225 Unamortized premium on long-term debt - -
226 Unamortized discount on long-term debt - -
-------- --------
Total Long-Term Debt 5,000 5,000
-------- --------
CURRENT AND ACCRUED LIABILITIES
231 Notes payable - -
232 Accounts payable 13,801 8,598
233 Notes payable to associate companies (Schedule XIII) - -
234 Accounts payable to associate companies (Schedule XIII) 13,780 16,907
236 Taxes accrued 5,504 922
237 Interest accrued 72 -
238 Dividends declared - -
241 Tax collections payable 4 4
242 Miscellaneous current and accrued liabilities (Schedule XIII) 94,061 76,537
-------- --------
Total Current and Accrued Liabilities 127,222 102,968
-------- -------
DEFERRED CREDITS
253 Other deferred credits 3,865 3,717
255 Accumulated deferred investment tax credits - -
-------- --------
Total Deferred Credits 3,865 3,717
-------- --------
282 ACCUMULATED DEFERRED INCOME TAXES - -
--------------------------------- -------- --------
TOTAL LIABILITIES AND PROPRIETARY CAPITAL 137,949 113,554
-------- -------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
6
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1997
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------
SCHEDULE II - SERVICE COMPANY PROPERTY
- -------------------------------------------------------------------------------------------------------------------
BALANCE AT OTHER BALANCE
BEGINNING ADDITIONS RETIREMENTS CHANGES AT
DESCRIPTION OF YEAR 1/ CLOSE OF
YEAR
- -------------------------------------------------------------------------------------------------------------------
SERVICE COMPANY PROPERTY
Account
301 ORGANIZATION - - - - -
303 MISCELLANEOUS
INTANGIBLE PLANT - - - - -
304 LAND & LAND RIGHTS - - - - -
305 STRUCTURES AND
IMPROVEMENTS - - - - -
306 LEASEHOLD 1,539 - - - 1,539
307 EQUIPMENT 2/ 5,667 599 1,528 - 4,738
308 OFFICE
FURNITURE AND
EQUIPMENT 2/ 4,144 88 20 - 4,212
309 AUTOMOBILES,
OTHER
VEHICLES, AND
RELATED GARAGE
EQUIPMENT - - - - -
310 AIRCRAFT AND
AIRPORT
EQUIPMENT - - - - -
311 OTHER SERVICE
COMPANY
PROPERTY 3/ 1,081 - 15 - 1,066
------ --- ----- ----- ------
SUB-TOTAL 12,431 687 1,563 - 11,555
------ --- ----- ----- ------
107 CONSTRUCTION
WORK IN
PROGRESS - - - - -
------ --- ----- ----- ------
TOTAL 12,431 687 1,563 - 11,555
------ --- ----- ----- ------
() Denotes deficit or credit balance.
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
7
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1997
(Thousands of Dollars)
- -----------------------------------------------------------------------------
SCHEDULE II - CONTINUED
- -----------------------------------------------------------------------------
1/PROVIDE AN EXPLANATION OF THOSE CHANGES CONSIDERED MATERIAL:
No changes were considered material.
- ------------------------------------------------------------------------------
2/ SUBACCOUNTS ARE REQUIRED FOR EACH CLASS OF EQUIPMENT OWNED. THE SERVICE
COMPANY SHALL PROVIDE A LISTING BY SUBACCOUNT OF EQUIPMENT ADDITIONS
DURING THE YEAR AND THE BALANCE AT THE CLOSE OF THE YEAR:
BALANCE
SUBACCOUNT DESCRIPTION ADDITIONS AT
CLOSE OF
YEAR
- -------------------------------------------------------------------------------
EQUIPMENT
Personal Computer Equipment 606 4,405
Mainframe Computer Equipment - 135
Office Automation Equipment - 2
Telecommunication Equipment (7) 196
--- -----
599 4,738
--- -----
OFFICE FURNITURE AND EQUIPMENT
Office Furniture and Equipment 8 2,242
Miscellaneous Equipment 80 1,970
--- -----
88 4,212
--- -----
- ------------------------------------------------------------------------------
3/ DESCRIBE OTHER SERVICE COMPANY PROPERTY:
Purchased computer software and licenses.
<PAGE>
<TABLE>
<CAPTION>
8
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1997
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
SCHEDULE III
ACCUMULATED PROVISION FOR DEPRECIATION AND
AMORTIZATION OF SERVICE COMPANY PROPERTY
- -------------------------------------------------------------------------------------------------------------
BALANCE AT ADDITIONS BALANCE AT
BEGINNING CHARGED TO OTHER CLOSE OF
DESCRIPTION OF YEAR ACCOUNT RETIREMENTS CHANGES YEAR
403 1/
- --------------------------------------------------------------------------------------------------------------
Account
301 ORGANIZATION - - - - -
303 MISCELLANEOUS
INTANGIBLE PLANT - - - - -
304 LAND AND LAND
RIGHTS - - - - -
305 STRUCTURES AND
IMPROVEMENTS - - - - -
306 LEASEHOLD
IMPROVEMENTS 1,539 - - - 1,539
307 EQUIPMENT 3,292 855 1,305 - 2,842
308 OFFICE
FURNITURE AND
EQUIPMENT 3,244 264 18 - 3,490
309 AUTOMOBILES,
OTHER VEHICLES,
AND RELATED
GARAGE
EQUIPMENT - - - - -
310 AIRCRAFT AND
AIRPORT
EQUIPMENT - - - - -
311 OTHER SERVICE
COMPANY
PROPERTY 928 137 14 - 1,051
------ ------ ------ ------- -----
TOTAL 9,003 1,256 1,337 - 8,922
------ ------ ------ ------- -----
1/ PROVIDE AN EXPLANATION OF THOSE CHANGES CONSIDERED MATERIAL:
None
</TABLE>
<PAGE>
9
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1997
(Thousands of Dollars)
- -------------------------------------------------------------------------------
SCHEDULE IV - INVESTMENTS
- -------------------------------------------------------------------------------
INSTRUCTIONS: Complete the following schedule concerning investments.
Under Account 124, "Other Investments", state each investment separately, with
description, including the name of the issuing company, number of shares or
principal amount, etc.
Under Account 136, "Temporary Cash Investments", list each investment
separately.
- -------------------------------------------------------------------------------
BALANCE AT BALANCE AT
DESCRIPTION BEGINNING CLOSE
OF YEAR OF YEAR
- -------------------------------------------------------------------------------
ACCOUNT 123 - INVESTMENT IN ASSOCIATE COMPANIES - -
ACCOUNT 124 - OTHER INVESTMENTS
Employee Energy Loans (Empl/Retiree) 1,431 1,168
Employee Computer Loans 358 436
----- -----
1,789 1,604
----- -----
ACCOUNT 136 - TEMPORARY CASH INVESTMENTS
Eurodollar Time Deposit 1,000 2,000
----- -----
TOTAL 2,789 3,604
----- -----
<PAGE>
10
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1997
(Thousands of Dollars)
- -------------------------------------------------------------------------------
SCHEDULE V - ACCOUNTS RECEIVABLE FROM ASSOCIATE COMPANIES
- -------------------------------------------------------------------------------
INSTRUCTIONS: Complete the following schedule listing accounts receivable from
each associate company. Where the service company has provided accommodation or
convenience payments for associate companies, a separate listing of total
payments for each associate company should be provided.
- -------------------------------------------------------------------------------
BALANCE AT BALANCE AT
DESCRIPTION BEGINNING CLOSE
OF YEAR OF YEAR
- -------------------------------------------------------------------------------
ACCOUNT 146 - ACCOUNTS RECEIVABLE FROM
ASSOCIATE COMPANIES
Southern Company Services 5,809 1,158
Alabama Power 54,517 41,951
Georgia Power 20,812 59,556
Gulf Power - 1
Southern Company Energy Solutions - 4
Savannah Electric - 3
Southern Energy - 33
------ -------
TOTAL 81,138 102,706
------ -------
- -------------------------------------------------------------------------------
ANALYSIS OF CONVENIENCE OR ACCOMMODATION PAYMENTS: TOTAL
PAYMENTS
----
TOTAL PAYMENTS -
----
<PAGE>
11
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1997
(Thousands of Dollars)
- -------------------------------------------------------------------------------
SCHEDULE VI - FUEL STOCK EXPENSES UNDISTRIBUTED
- -------------------------------------------------------------------------------
INSTRUCTIONS: Report the amount of labor and expenses incurred with respect to
fuel stock expenses during the year and indicate amount attributable to each
associate company. Under the section headed "Summary" listed below give an
overall report of the fuel functions performed by the service company.
- -------------------------------------------------------------------------------
DESCRIPTION LABOR EXPENSES TOTAL
- -------------------------------------------------------------------------------
ACCOUNT 152 - FUEL STOCK EXPENSES
UNDISTRIBUTED
Not Applicable
- -------------------------------------------------------------------------------
SUMMARY:
Not Applicable
<PAGE>
12
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1997
(Thousands of Dollars)
- -------------------------------------------------------------------------------
SCHEDULE VII - STORES EXPENSE UNDISTRIBUTED
- -------------------------------------------------------------------------------
INSTRUCTIONS: Report the amount of labor and expenses incurred with respect to
stores expense during the year and indicate amount attributable to each
associate company.
- -------------------------------------------------------------------------------
DESCRIPTION LABOR EXPENSES TOTAL
- -------------------------------------------------------------------------------
ACCOUNT 163 - STORES EXPENSE
UNDISTRIBUTED
Not Applicable
<PAGE>
13
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1997
(Thousands of Dollars)
- -------------------------------------------------------------------------------
SCHEDULE VIII
MISCELLANEOUS CURRENT AND ACCRUED ASSETS
- -------------------------------------------------------------------------------
INSTRUCTIONS: Provide detail of items in this account. Items less than $10,000
may be grouped, showing the number of items in each group.
- -------------------------------------------------------------------------------
BALANCE AT BALANCE AT
DESCRIPTION BEGINNING CLOSE
OF YEAR OF YEAR
- -------------------------------------------------------------------------------
ACCOUNT 174 - MISCELLANEOUS CURRENT AND
ACCRUED ASSETS - -
----- -----
TOTAL - -
----- -----
<PAGE>
14
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1997
(Thousands of Dollars)
- -------------------------------------------------------------------------------
SCHEDULE IX - MISCELLANEOUS DEFERRED DEBITS
- -------------------------------------------------------------------------------
INSTRUCTIONS: Provide detail of items in this account. Items less than $10,000
may be grouped by class showing the number of items in each class.
- -------------------------------------------------------------------------------
BALANCE AT BALANCE AT
DESCRIPTION BEGINNING CLOSE
OF YEAR OF YEAR
- -------------------------------------------------------------------------------
ACCOUNT 186 - MISCELLANEOUS DEFERRED DEBITS
Undistributed Legal Fees Accrual 35 23
Undistributed Labor Accrual 150 120
Undistributed Foreign Withholding Employee Taxes - 73
Personal Access Data System-1996 Assessment 77 75
Sundry Delayed (4 items) 2 5
--- ---
Total 264 296
--- ---
<PAGE>
15
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1997
(Thousands of Dollars)
- -------------------------------------------------------------------------------
SCHEDULE X - RESEARCH, DEVELOPMENT OR DEMONSTRATION EXPENDITURES
- -------------------------------------------------------------------------------
INSTRUCTIONS: Provide a description of each material research, development, or
demonstration project which incurred costs by the service corporation
during the year.
- -------------------------------------------------------------------------------
DESCRIPTION AMOUNT
- -------------------------------------------------------------------------------
ACCOUNT 188 - RESEARCH, DEVELOPMENT, OR DEMONSTRATION
EXPENDITURES
Not Applicable
<PAGE>
<TABLE>
<CAPTION>
16
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
- -----------------------------------------------------------------------------------------------------------------------------------
For the Year Ended December 31, 1997
(Thousands of Dollars)
- -----------------------------------------------------------------------------------------------------------------------------------
SCHEDULE XI - PROPRIETARY CAPITAL
- -----------------------------------------------------------------------------------------------------------------------------------
NUMBER OF PAR OR STATED OUTSTANDING CLOSE OF PERIOD
SHARES VALUE
ACCOUNT NUMBER CLASS OF STOCK AUTHORIZED PER SHARE NO. OF SHARES TOTAL AMOUNT
- -----------------------------------------------------------------------------------------------------------------------------------
201 COMMON STOCK ISSUED 1,000 10.00 1,000 10
- -----------------------------------------------------------------------------------------------------------------------------------
INSTRUCTIONS: Classify amounts in each account with brief explanation, disclosing the general nature of transactions which
gave rise to the reported amounts.
- -----------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION AMOUNT
- -----------------------------------------------------------------------------------------------------------------------------------
ACCOUNT 211 - MISCELLANEOUS PAID-IN CAPITAL
Amount Paid in for Common Stock in Excess of Par Value 990
Other Paid-In Capital 862
ACCOUNT 215 - APPROPRIATED RETAINED EARNINGS -
------
TOTAL 1,852
- -----------------------------------------------------------------------------------------------------------------------------------
INSTRUCTIONS: Give particulars concerning net income or (loss) during the year, distinguishing between compensation for the use of
capital owed or net loss remaining from servicing nonassociates per the General Instructions of the Uniform System of Accounts. For
dividends paid during the year in cash or otherwise, provide rate percentage, amount of dividend, date declared and date paid.
- -----------------------------------------------------------------------------------------------------------------------------------
BALANCE AT NET INCOME BALANCE AT
DESCRIPTION BEGINNING OR DIVIDENDS CLOSE
OF YEAR (LOSS) PAID OF YEAR
- -----------------------------------------------------------------------------------------------------------------------------------
ACCOUNT 216 - UNAPPROPRIATED RETAINED EARNINGS - - - -
TOTAL - - - -
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
17
<S> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
- -----------------------------------------------------------------------------------------------------------------------------------
For the Year Ended December 31, 1997
(Thousands of Dollars)
- -----------------------------------------------------------------------------------------------------------------------------------
SCHEDULE XII - LONG-TERM DEBT
- -----------------------------------------------------------------------------------------------------------------------------------
INSTRUCTIONS: Advances from associate companies should be reported separately for advances on notes, and advances on open account.
Names of associate companies from which advances were received shall be shown under the class and series of obligation column. For
Account 224 - Other long-term debt provide the name of creditor company or organization, terms of the obligation, date of
maturity, interest rate, and the amount authorized and outstanding.
- -----------------------------------------------------------------------------------------------------------------------------------
TERMS OF DATE BALANCE AT 1/ BALANCE
NAME OF CREDITOR OBLIG OF INTEREST AMOUNT BEGINNING OF ADDITIONS EDUCTIONS AT
CLASS & MATURITY RATE AUTHORIZED OF YEAR CLOSE
SERIES OF YEAR
OF OBLIGATION
- -----------------------------------------------------------------------------------------------------------------------------------
ACCOUNT 223 - ADVANCES FROM
ASSOCIATE COMPANIES:
ADVANCES ON NOTES:
On or
before
Southern Company 12/31/2000 Variable 10,000 5,000 - - 5,000
ADVANCES ON OPEN ACCOUNT: - - - - -
ACCOUNT 224 - OTHER LONG-TERM
DEBT: - - - - -
------ ----- ---- ---- ------
TOTAL 10,000 5,000 - - 5,000
------ ----- ---- ---- -----
- -----------------------------------------------------------------------------------------------------------------------------------
1/ GIVE AN EXPLANATION OF DEDUCTIONS:
None
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
18
- -------------------------------------------------------------------------------
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1997
(Thousands of Dollars)
- -------------------------------------------------------------------------------
SCHEDULE XIII-CURRENT AND ACCRUED LIABILITIES
- -------------------------------------------------------------------------------
INSTRUCTIONS: Provide balance of notes and accounts payable to each associate
company. Give description and amount of miscellaneous current and accrued
liabilities. Items less than $10,000 may be grouped, showing the number of
items in each group.
- -------------------------------------------------------------------------------
BALANCE BALANCE
AT AT
DESCRIPTION BEGINNING CLOSE
OF YEAR OF YEAR
- -------------------------------------------------------------------------------
ACCOUNT 233 - NOTES PAYABLE TO ASSOCIATE COMPANIES - -
------ ------
TOTAL - -
------- ------
- -------------------------------------------------------------------------------
ACCOUNT 234 - ACCOUNTS PAYABLE TO ASSOCIATE COMPANIES
Alabama Power Company 7,424 1,646
Georgia Power 1,569 5,301
Southern Company Services 7,914 6,833
------- ------
TOTAL 16,907 13,780
- -------------------------------------------------------------------------------
ACCOUNT 242 - MISCELLANEOUS CURRENT AND ACCRUED
LIABILITIES
Accrual for Pensions 36,264 12,886
Accrual for Pension Performance Sharing - 275
Supplemental Payments - 518
Accumulated Provision for Pensions and
Benefits-Post-Retirement
Life Insurance 6,236 8,868
Accumulated Provision for Pensions and
Benefits-Post-Retirement
Medical Insurance 15,640 31,044
Accumulated Provision for Supplemental Pensions 237 535
Employee Stock Option Plan Contribution 476 794
Vacation Pay Accrual 5,671 13,483
Performance Pay Plan Accrual 7,913 16,740
Productivity Improvement Plan Accrual 3,663 7,110
Worker's Compensation Awards 63 339
Accumulated Provision for Supplemental Benefits-ESP/ESOP 46 69
Accumulated Provision for Post-Employment Benefits-Medical 328 1,400
------ ------
TOTAL 76,537 94,061
------ ------
- -------------------------------------------------------------------------------
<PAGE>
19
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1997
- -------------------------------------------------------------------------------
SCHEDULE XIV
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
INSTRUCTIONS: The space below is provided for important notes regarding the
financial statements or any account thereof. Furnish particulars
as to any significant contingent assets or liabilities existing
at the end of the year. Notes relating to financial statements
shown elsewhere in this report may be indicated here by
reference.
- -------------------------------------------------------------------------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General
On December 14, 1990, pursuant to the provisions of the Public Utilities
Holding Company Act of 1935, the Securities and Exchange Commission
("SEC") approved the formation of the Southern Nuclear Operating Company,
Inc. (the "Company"), a wholly owned subsidiary of Southern Company
("Southern"), to provide services in connection with the Southern electric
system's nuclear power plants. The Company was incorporated on December
17, 1990 and commenced operations on January 1, 1991. On January 1, 1991,
the Company entered into nuclear service agreements with Georgia Power to
operate Plant Hatch and Plant Vogtle and Alabama Power to operate Plant
Farley.
The Company follows the SEC's Uniform System of Accounts for Mutual
Service Companies and Subsidiary Service Companies.
The Company has no earnings or retained earnings since it renders services
to its client companies' nuclear power plants at cost, as further
discussed in Note 3.
Effective December 23, 1991, the Nuclear Regulatory Commission ("NRC")
license for Alabama Power's Plant Farley was amended to add the Company as
plant operator, and the Company assumed responsibility for such operations
pursuant to an operating agreement with Alabama Power. The NRC licenses
for Georgia Power's Plant Hatch and Plant Vogtle were amended to add the
Company as plant operator, and effective March 22, 1997, the Company
assumed responsibility for such operations pursuant to an operating
agreement with Georgia Power. The Company also entered into an operating
agreement with Georgia Power for the operation of Plant Wilson, a
combustion turbine-powered plant located adjacent to Plant Vogtle,
effective March 22, 1997.
The Company follows generally accepted accounting principles and complies
with the accounting policies and practices prescribed by its commissions.
The preparation of financial statements in conformity with generally
accepted accounting principles requires the use of estimates, and the
actual results may differ from those estimates.
- -------------------------------------------------------------------------------
<PAGE>
19A
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1997
- -------------------------------------------------------------------------------
SCHEDULE XIV
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
INSTRUCTIONS: The space below is provided for important notes regarding the
financial statements or any account thereof. Furnish particulars
as to any significant contingent assets or liabilities existing
at the end of the year. Notes relating to financial statements
shown elsewhere in this report may be indicated here by
reference.
- ------------------------------------------------------------------------------
Financial Instruments
The carrying amount of the Company's financial instruments covered under
Statement of Financial Accounting Standard ("SFAS") No. 107, "Disclosure
About Fair Value of Financial Instruments" approximates fair value at
December 31, 1997 and 1996.
Income Taxes
The Company is included in the consolidated federal income tax return
filed by Southern. In conformity with SFAS No. 109, "Accounting for Income
Taxes," the Company recognizes deferred tax assets and deferred tax
liabilities for estimated future income tax effects attributable to
temporary differences between the carrying amounts of assets and
liabilities in the financial statements and their respective tax basis.
The measurement of deferred taxes is based on provisions of enacted tax
law.
The consolidated taxes payable are allocated between the Company and
Southern's other subsidiaries based on their respective contributions to
consolidated taxable income. See Note 5 for further information regarding
income taxes.
Property, Equipment, and Depreciation and Amortization
Property and equipment are recorded at cost. Depreciation and amortization
are provided on the straight-line method over the estimated economic life
of the related asset (ranging from 5 to 12 years). Leasehold improvements
are amortized over the shorter of their economic life or the lives of the
respective leases.
On retirement or sale of assets, the cost of such assets and related
accumulated depreciation are removed from the accounts and the gain or
loss, if any, is credited or charged to income.
2. RETIREMENT BENEFITS
Pension Plan
The Company has a defined benefit, trusteed, non-contributory pension plan
covering substantially all regular employees. Benefits are based on one of
the following formulas: years of service and final average pay or years of
service and a flat-dollar benefit. The Company uses the "entry age normal
method with a frozen initial liability" actuarial method for funding
purposes, subject to limitations under federal income tax regulations.
Amounts funded to the pension trusts are primarily invested in equity and
fixed-income
- -------------------------------------------------------------------------------
<PAGE>
19B
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1997
- -------------------------------------------------------------------------------
SCHEDULE XIV
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
INSTRUCTIONS: The space below is provided for important notes regarding the
financial statements or any account thereof. Furnish particulars
as to any significant contingent assets or liabilities existing
at the end of the year. Notes relating to financial statements
shown elsewhere in this report may be indicated here by
reference.
- -------------------------------------------------------------------------------
securities. SFAS Statement No. 87, Employers' Accounting for Pensions,
requires use of the "projected unit credit" actuarial method for financial
reporting purposes.
Postretirement Benefits
The Company also provides certain medical care and life insurance benefits
for retired employees. Substantially all employees may become eligible for
these benefits when they retire. The Company accounts for these benefits
on an accrual basis. Expenses incurred to provide these benefits were
approximately $5,360,215 and $2,482,000 in 1997 and 1996, respectively.
SFAS Statement No. 106, Employers' Accounting for Postretirement Benefits
Other Than Pensions, requires that medical care and life insurance
benefits for retired employees be accounted for on an accrual basis using
a specified actuarial method, "benefit/years-of-service." This method
spreads the expected cost of such benefits to each year of an employee's
service until the employee becomes fully eligible to receive the benefits.
Funded Status and Cost of Benefits
The funded status of the plans and reconciliation to amounts reflected in
the Comparative Balance Sheet at December 31 are as follows:
Pension
---------------------------
1997 1996
---- ----
Actuarial present value of benefit
obligations: (In thousands)
Vested benefits $ 98,226 $ 41,759
Nonvested benefits 8,554 4,980
--------- ---------
Accumulated benefit obligation 106,780 46,739
Additional amounts related to projected
salary increases 80,287 34,140
--------- ---------
Projected benefit obligation 187,067 80,879
Less:
Fair value of plan assets 259,633 72,163
Unrecognized net gain (85,715) (26,940)
Unrecognized prior service cost 5,658 1,997
Unrecognized transition asset (5,395) (2,605)
--------- ---------
Accrued pension cost recognized in the
balance sheets $ 12,886 $ 36,264
========= =========
- -------------------------------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
19C
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1997
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------
SCHEDULE XIV
NOTES TO FINANCIAL STATEMENTS
- ---------------------------------------------------------------------------------------------------
INSTRUCTIONS: The space below is provided for important notes regarding the financial statements or
any account thereof. Furnish particulars as to any significant contingent assets or liabilities
existing at the end of the year. Notes relating to financial statements shown elsewhere in this
report may be indicated here by reference.
- ---------------------------------------------------------------------------------------------------
Postretirement Benefits
Medical Life
1997 1996 1997 1996
---- ---- ---- -----
Actuarial present value of
benefit obligations: (In thousands)
Retirees and dependents $ 2,735 $ 1,888 $ 932 $ 833
Employees eligible to retire 10,643 4,635 - -
Other employees 28,369 10,921 8,826 4,001
--------- -------- -------- -------
Accumulated benefit obligation 41,747 17,444 9,758 4,834
Less:
Fair value of plan assets 58 - 48 -
Unrecognized net loss (gain) 7,331 4,332 (1,324) (945)
Unrecognized transition obligation 5,716 - 2,591 -
Unrecognized prior service cost (2,402) (2,528) (425) (457)
--------- -------- -------- -------
Accrued liability recognized in the
balance sheets $ 31,044 $ 15,640 $ 8,868 $ 6,236
========= ======== ======== =======
The weighted average rates used in
actuarial calculations were:
1997 1996
---- ----
Discount 7.5% 7.8%
Annual salary increase 5.0% 5.3%
Long-term return on plan assets 8.5% 8.5%
An additional assumption used in measuring the accumulated postretirement medical benefit
obligation was a weighted average medical care cost trend rate of 8.8 percent for 1997,
decreasing gradually to 5.5 percent through the year 2005 and remaining at that level
thereafter. An annual increase in the assumed medical care cost trend rate by 1.0 percent
would increase the accumulated medical benefit obligation as of December 31, 1997, by $1.8
million and the aggregate of the service and interest cost components of the net retiree cost
by approximately $200,000.
The components of the plans' net cost are shown below:
Pension
-----------------------------
1997 1996
---- ----
(In thousands)
Benefits earned during the year $ 9,464 $ 4,656
Interest cost on projected benefit obligation 11,186 5,733
Actual (return) loss on plan assets (21,278) (7,714)
Net amortization and deferrals 5,876 1,994
-------- --------
Net pension benefit $ 5,248 $ 4,669
======== ========
- ---------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
19D
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1997
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------
SCHEDULE XIV
NOTES TO FINANCIAL STATEMENTS
- ---------------------------------------------------------------------------------------------------
INSTRUCTIONS: The space below is provided for important notes regarding the financial statements
or any account thereof. Furnish particulars as to any significant contingent assets
or liabilities existing at the end of the year. Notes relating to financial statements
shown elsewhere in this report may be indicated here by reference.
- ---------------------------------------------------------------------------------------------------
Of the net pension cost recorded, $5.2 million in 1997 and $4.4 million in 1996 were recorded in
operating expenses, and the remainder was recorded in construction and other accounts.
Postretirement Benefits
---------------------------------------------------
Medical Life
-------------------- --------------------
1997 1996 1997 1996
---- ---- ---- ----
(In thousands)
Benefits earned during the year $1,445 $ 738 $ 424 $ 249
Interest cost on accumulated benefit obligation 2,513 1,158 592 332
Amortization of transition obligation over 20 years 268 - 122 -
Net amortization and deferrals 61 49 (64) (44)
------ ------ ------ ------
Net postretirement cost $4,287 $1,945 $1,074 $ 537
====== ====== ====== ======
</TABLE>
Net postretirement medical and life insurance costs recorded in 1997 and
1996 were charged to operating expenses.
3. SERVICE AND OPERATING AGREEMENTS
The Company, in accordance with its operating agreements with Alabama Power
and Georgia Power, renders the following nuclear-related services at cost:
general executive and advisory services; general operations management and
technical services; administrative services including procurement,
accounting and statistical, employee relations, and system and procedures
services; strategic planning and budgeting services; and other services
with respect to business and operations.
The Company, in accordance with its service agreement with Southern Company
Services ("SCS"), a subsidiary of Southern, receives the following services
at cost: general executive and advisory services, general engineering,
design engineering, payroll, purchasing, accounting and statistical,
finance and treasury, taxes, insurance and pensions, corporate budgeting,
employee relations, systems and procedures, and other services with respect
to business and operations.
<PAGE>
19E
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1997
- -------------------------------------------------------------------------------
SCHEDULE XIV
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
INSTRUCTIONS: The space below is provided for important notes regarding the
financial statements or any account thereof. Furnish particulars
as to any significant contingent assets or liabilities existing
at the end of the year. Notes relating to financial statements
shown elsewhere in this report may be indicated here by
reference.
- -------------------------------------------------------------------------------
The Company, in accordance with its service agreement with Southern
Company Energy Solutions, a subsidiary of Southern, may provide the
following services at costs: general engineering; nuclear plant
operations; accounting and statistical; rates; budgeting; systems and
procedures; access to and use of facilities; training; general; and other
services with respect to the operation, maintenance or support of nuclear
power plants.
4. NOTE PAYABLE TO PARENT COMPANY
The Company is indebted to Southern for a $5 million note payable dated
December 31, 1990 and due on or before December 31, 2000. The note bears
interest at a rate comparable with market rates which is adjusted monthly,
with interest payable quarterly. Proceeds from the note were used to pay
affiliated companies for certain property and equipment received in
January 1991.
5. INCOME TAXES
Details of the federal and state income tax provisions (benefits) are as
follows (Note 1):
1997 1996
----------- -------
(In thousands)
Total provision for income taxes:
Federal --
Currently payable $ 5,891 $ 2,030
Deferred - Current year (9,141) (5,084)
- Reversal of prior years 3,036 3,451
-------- --------
(214) 397
-------- --------
State --
Currently payable 1,160 (360)
Deferred - Current Year (1,239) (786)
- Reversal of prior years 418 556
-------- --------
339 (590)
-------- --------
Federal and state income taxes charged
(credited) to operations $ 125 $ (193)
======== =========
<PAGE>
19F
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1997
- ------------------------------------------------------------------------------
SCHEDULE XIV
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
INSTRUCTIONS: The space below is provided for important notes regarding the
financial statements or any account thereof. Furnish particulars
as to any significant contingent assets or liabilities existing
at the end of the year. Notes relating to financial statements
shown elsewhere in this report may be indicated here by
reference.
- -------------------------------------------------------------------------------
The tax effects of temporary differences between the carrying amounts of
assets and liabilities in the financial statements and their respective tax
bases, which give rise to deferred tax assets and liabilities are as
follows:
1997 1996
-------- --------
(In thousands)
Deferred tax liabilities:
Accelerated depreciation $ (7) $ (216)
Other (1,370) (838)
-------- --------
Total (1,377) (1,054)
-------- --------
Deferred tax assets:
Deferred costs 29,640 26,049
Other 15 13
-------- --------
Total 29,655 26,062
-------- --------
Net deferred tax assets 28,278 25,008
Portion included in current assets (3,841) (1,315)
-------- --------
Accumulated deferred income taxes
in the comparative balance sheets $ 24,437 $ 23,693
======== ========
Deferred income taxes result from certain costs that are recognized for
income tax purposes in periods different from those used for book purposes.
The federal statutory income tax rate differs from the effective income tax
rate due to consolidated tax savings and the nondeductible portion of various
expenses.
<PAGE>
19G
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1997
- -------------------------------------------------------------------------------
SCHEDULE XIV
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
INSTRUCTIONS: The space below is provided for important notes regarding the
financial statements or any account thereof. Furnish particulars
as to any significant contingent assets or liabilities existing
at the end of the year. Notes relating to financial statements
shown elsewhere in this report may be indicated here by
reference.
- -------------------------------------------------------------------------------
6. RENTS
The Company subleases its office space from an affiliated company on a
month-to-month basis. Current monthly billing is approximately $100,942.
7. OUTSIDE SERVICES
The Company incurred expenses of approximately $63 million and $66 million
for 1997 and 1996, respectively, associated with services provided by SCS
(see Note 3 for description of services provided). These expenses are
primarily included in outside services in the accompanying statements of
income.
8. DUES AND ASSESSMENTS
Effective with the signing of the operating agreements with Alabama Power
and Georgia Power, as discussed in Note 1, the Company became responsible
for dues and assessments from the Nuclear Regulatory Commission and other
industry trade and business associations. The detail of such expenses
incurred for 1997 and 1996 is as follows:
1997 1996
------- ----
(In thousands)
Nuclear Regulatory Commission $ 13,640 $ 5,397
Institute of Nuclear Power Operations 3,737 745
Nuclear Energy Institute 1,229 990
Electric Power Research Institute 452 833
Other 1,530 1,971
-------- -------
$ 20,588 $ 9,936
======== =======
<PAGE>
19H
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1997
- -------------------------------------------------------------------------------
SCHEDULE XIV
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
INSTRUCTIONS: The space below is provided for important notes
regarding the financial statements or any account
thereof. Furnish particulars as to any significant
contingent assets or liabilities existing at the end of
the year. Notes relating to financial statements shown
elsewhere in this report may be indicated here by
reference.
- -------------------------------------------------------------------------------
9. TRANSFERS OF ASSETS AND LIABILITIES FROM AFFILIATED COMPANIES
Effective March 22, 1997, the Company entered into an operating agreement
with Georgia Power for the operation of Plant Hatch and Plant Vogtle as
discussed in Note 1. During 1997, certain employee related assets and
liabilities were transferred at cost to the Company from Georgia Power.
The Company has recorded affiliated company accounts receivable and
payable associated with these transfers. A summary of these transactions
with affiliated companies is as follows:
Description Asset Liability
----------- ----- ---------
(In thousands)
Postretirement benefits $ - $ 13,045
Postemployment benefits - 1,075
Vacation pay accrual - 6,401
Incentive pay accrual - 2,224
Deferred compensation accrual - 7
Employee receivables 9 -
Deferred income taxes 5,046 -
Accounts receivable from affiliated companies 22,752 -
Accounts payable from affiliated companies - 5,055
-------- ---------
Total $ 27,807 $ 27,807
======== ========
The Company has previously recorded affiliated company accounts receivable
and payable associated with certain employee related assets and
liabilities associated with employees who have transferred to or from
affiliated companies. In 1997, as a result of Southern consolidating the
individual company pension plans, the Company recorded reductions in the
following asset and liability accounts:
Description
(In thousands)
Accrual for pensions $ 22,790
Deferred income taxes 8,297
Accounts receivable from affiliated companies 22,790
Accounts payable to affiliated companies 8,297
<PAGE>
20
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1997
(Thousands of Dollars)
- -------------------------------------------------------------------------------
SCHEDULE XV - STATEMENT OF INCOME
- -------------------------------------------------------------------------------
ACCOUNT DESCRIPTION CURRENT PRIOR
YEAR YEAR
- -------------------------------------------------------------------------------
INCOME
457 Services rendered to associate companies 337,350 201,735
458 Services rendered to nonassociate companies - -
421 Miscellaneous income or loss 297 298
------- --------
TOTAL INCOME 337,647 202,033
------- -------
EXPENSE
920 Salaries and wages 190,261 86,987
921 Office supplies and expenses 11,970 11,084
922 Administrative expense transferred
credit - -
923 Outside services employed 67,312 66,329
924 Property insurance 217 73
925 Injuries and damages 503 349
926 Employee pensions and benefits 27,271 14,094
928 Regulatory commission expense - -
930.1 General advertising expenses - -
930.2 Miscellaneous general expenses 20,983 9,936
931 Rents 1,475 2,038
932 Maintenance of structures and equipment 1,597 1,571
403 Depreciation and amortization expense 1,256 1,419
408 Taxes other than income taxes 11,690 5,874
409 Income taxes 7,051 1,670
410 Provision for deferred income taxes 4,437 4,134
411 Provision for deferred income taxes -
credit (11,362) (5,997)
411.5 Investment tax credit - -
426.1 Donations 159 226
426.5 Other deductions 2,542 1,969
427 Interest on long-term debt - -
430 Interest on debt to associate companies 282 277
431 Other interest expense 3 -
------- -------
TOTAL EXPENSE 337,647 202,033
------- -------
NET INCOME OR (LOSS) - -
( ) Denotes deficit or credit balance.
<PAGE>
21
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1997
(Thousands of Dollars)
- -------------------------------------------------------------------------------
ANALYSIS OF BILLING
ASSOCIATE COMPANIES
ACCOUNT 457
- -------------------------------------------------------------------------------
DIRECT INDIRECT COMPENSATION TOTAL
NAME OF ASSOCIATE COMPANY COSTS COSTS FOR USE OF AMOUNT
CHARGED CHARGED CAPITAL BILLED
457-1 457-2 457-3
- -------------------------------------------------------------------------------
Alabama Power 104,253 12,361 94 116,708
Georgia Power 195,281 24,721 188 220,190
Gulf Power 21 - - 21
Mississippi Power 13 - - 13
Savannah Electric 10 - - 10
Southern Company Services 370 - - 370
Southern Company Energy Solutions 5 - - 5
Southern Energy 33 - - 33
------- ------ ----- -------
TOTAL 299,986 37,082 282 337,350
------- ------ --- -------
<PAGE>
<TABLE>
<CAPTION>
22
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1997
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------
ANALYSIS OF BILLING
NONASSOCIATE COMPANIES
ACCOUNT 458
- ---------------------------------------------------------------------------------------------------------------------------
DIRECT INDIRECT COMPENSATION EXCESS
COST COST FOR USE TOTAL OR TOTAL
NAME OF NONASSOCIATE CHARGED CHARGED OF CAPITAL COST DEFICIENCY BILLED AMOUNT
------- ------- ---------- ---- ---------- ------ -------
458-1 458-2 458-3 458-4
- ---------------------------------------------------------------------------------------------------------------------------
Not Applicable
- ---------------------------------------------------------------------------------------------------------------------------
Instruction: Provide a brief description of the services rendered to each nonassociate company:
None
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
23
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1997
(Thousands of Dollars)
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
SCHEDULE XVI
ANALYSIS OF CHARGES FOR SERVICE
ASSOCIATE AND NONASSOCIATE COMPANIES
- -----------------------------------------------------------------------------------------------------------------------------------
ASSOCIATE COMPANY NONASSOCIATE COMPANY TOTAL CHARGES
CHARGES CHARGES FOR SERVICE
- -----------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF ITEMS DIRECT INDIRECT DIRECT INDIRECT DIRECT INDIRECT RECLASSI-
COST COST TOTAL** COST COST TOTAL COST COST FICATION* TOTAL
- -----------------------------------------------------------------------------------------------------------------------------------
920 SALARIES AND WAGES 176,624 13,637 190,261 - - - 176,624 13,637 - 190,261
921 OFFICE SUPPLIES AND
EXPENSES 9,227 2,525 11,752 - - - 9,227 2,525 218 11,970
922 ADMINISTRATIVE EXPENSE
TRANSFERRED - CREDIT - - - - - - - - - -
923 OUTSIDE SERVICES
EMPLOYED 54,984 12,328 67,312 - - 54,984 12,328 - 67,312
924 PROPERTY INSURANCE - 217 217 - - - - 217 - 217
925 INJURIES AND DAMAGES 437 66 503 - - - 437 66 - 503
926 EMPLOYEE PENSIONS AND
BENEFITS 25,144 2,446 27,590 - - - 25,144 2,446 (319) 27,271
928 REGULATORY COMMISSION
EXPENSE - - - - - - - - - -
930.1 GENERAL ADVERTISING
EXPENSES - 1 1 - - - - 1 (1) -
930.2 MISCELLANEOUS GENERAL
EXPENSES 20,321 658 20,979 - - - 20,321 658 4 20,983
931 RENTS 332 1,045 1,377 - - - 332 1,045 98 1,475
932 MAINTENANCE OF
STRUCTURES AND
EQUIPMENT 1,389 208 1,597 - - - 1,389 208 - 1,597
403 DEPRECIATION AND
AMORTIZATION EXPENSE 197 1,059 1,256 - - - 197 1,059 - 1,256
408 TAXES OTHER THAN
INCOME TAXES 10,810 880 11,690 - - - 10,810 880 - 11,690
409 INCOME TAXES 7,051 7,051 - - - - 7,051 - 7,051
410 PROVISION FOR DEFERRED
INCOME TAXES - 4,437 4,437 - - - - 4,437 - 4,437
411 PROVISION FOR DEFERRED
INCOME TAXES
CREDIT - (11,362) (11,362) - - - - (11,362) - (11,362)
411.5 INVESTMENT TAX CREDIT - - - - - - - - - -
426.1 DONATIONS 3 156 159 - - - 3 156 - 159
426.5 OTHER DEDUCTIONS 518 2,024 2,542 - - - 518 2,024 - 2,542
427 INTEREST ON LONG -
TERM DEBT - - - - - - - - - -
431 OTHER INTEREST EXPENSE - 3 3 - - - - 3 - 3
(Continued on page 23A)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
23A
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1997
(Thousands of Dollars)
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
SCHEDULE XVI
ANALYSIS OF CHARGES FOR SERVICE
ASSOCIATE AND NONASSOCIATE COMPANIES
- ---------------------------------------------------------------------------------------------------------------------------------
ASSOCIATE COMPANY NONASSOCIATE COMPANY TOTAL CHARGES
CHARGES CHARGES FOR SERVICE
- ---------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF ITEMS DIRECT INDIRECT DIRECT INDIRECT DIRECT INDIRECT RECLASSI-
COST COST TOTAL COST COST TOTAL COST COST FICATION* TOTAL
- ---------------------------------------------------------------------------------------------------------------------------------
INSTRUCTIONS: Total cost of service will equal for associate and nonassociate companies, the total amount billed under their
separate analysis of billing schedules.
- ---------------------------------------------------------------------------------------------------------------------------------
SUB-TOTAL EXPENSES = 299,986 37,379 337,365 - - - 299,986 37,379 337,365
COMPENSATION FOR
USE OF
EQUITY CAPITAL = - - - - - - - - - -
430 INTEREST ON DEBT TO
ASSOC. COMPANIES = - 282 282 - - - - 282 - 282
TOTAL EXPENSES = 299,986 37,661 337,647 - - - 299,986 37,661 - 337,647
421 MISCELLANEOUS
NONOPERATING
INCOME = - (297) (297) - - - - (297) - (297)
TOTAL COST OF
SERVICE = 299,986 37,364 337,350 - - - 299,986 37,364 - 337,350
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
( ) Denotes deficit or credit balance.
* Reclassified for financial reporting purposes
**Does not include reclassifications
<PAGE>
<TABLE>
<CAPTION>
24
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1997
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
SCHEDULE XVII
SCHEDULE OF EXPENSE DISTRIBUTION
BY
DEPARTMENT OR SERVICE FUNCTION
- ---------------------------------------------------------------------------------------------------------------------------------
DEPARTMENT OR SERVICE FUNCTION
DESCRIPTION Total Strategic Governmental Vogtle Hatch Farley Plant Technical Administrative Corporate
Amount Executive Analysis Affairs Project Project Project Wilson Services Services General
& Plant & Plant & Plant
- ---------------------------------------------------------------------------------------------------------------------------------
920 SALARIES AND
WAGES 190,261 831 285 240 44,157 49,808 50,132 160 7,040 8,025 29,583
921 OFFICE
SUPPLIES
AND
EXPENSES 11,970 114 117 101 1,709 1,616 1,709 1 1,388 3,994 1,221
922 ADMINISTRATIVE
EXPENSE
TRANSFERRED
- CREDIT - - - - - - - - - - -
923 OUTSIDE
SERVICES
EMPLOYED 67,312 74 15 2,166 11,424 15,943 17,590 - 3,072 8,111 8,917
924 PROPERTY
INSURANCE 217 - - - - - - - - - 217
925 INJURIES AND
DAMAGES 503 - - - - - - - - - 503
926 EMPLOYEE
PENSIONS
AND
BENEFITS 27,271 - - - - - 4 - - 160 27,107
928 REGULATORY
COMMISSION
EXPENSE - - - - - - - - - - -
930.1 GENERAL
ADVERTISING
EXPENSE - - - - - - - - - - -
930.2 MISCELLANEOUS
GENERAL
EXPENSES 20,983 878 - 2 5,559 5,420 7,071 2 1,780 122 149
931 RENTS 1,475 - - - 2 - 5 - 1 324 1,143
932 MAINTENANCE
OF
STRUCTURES
AND
EQUIPMENT 1,597 - - - - - - - - 1,597 -
403 DEPRECIATION
AND
AMORTIZATION
EXPENSE 1,256 - - - - - - - - - 1,256
408 TAXES OTHER
THAN
INCOME
TAXES 11,690 - - - - - - - - - 11,690
409 INCOME
TAXES 7,051 - - - - - - - - - 7,051
410 PROVISION
FOR
DEFERRED
INCOME
TAXES 4,437 - - - - - - - - - 4,437
411 PROVISION
FOR
DEFERRED
INCOME
TAXES-
CREDIT (11,362) - - - - - - - - - (11,362)
411.5 INVESTMENT
TAX
CREDIT - - - - - - - - - - -
426.1 DONATIONS 159 156 - - 1 2 - - - - -
426.5 OTHER
DEDUCTIONS 2,542 730 - 765 3 1 1 - 7 6 1,029
427 INTEREST ON
LONG-TERM
DEBT - - - - - - - - - - -
430 INTEREST ON
DEBT
TO
ASSOCIATE
COMPANIES 282 - - - - - - - - - 282
431 OTHER INTEREST
EXPENSE 3 - - - - - - - - - 3
------ ----- --- ----- ------ ------ ------ ----- ------ ------ ------
TOTAL
EXPENSES 337,647 2,783 417 3,274 62,855 72,790 76,512 163 13,288 22,339 83,226
421 MISCELLANEOUS
GAIN (297) - - - - - - - - - (297)
- ---------------------------------------------------------------------------------------------------------------------------------
INSTRUCTION: Indicate each department or service function. (see Instruction 01-3 General Structure of Accounting System:
Uniform System of Account).
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL COSTS 337,350 2,783 417 3,274 62,855 72,790 76,512 163 13,288 22,339 82,929
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
( ) Denotes deficit or credit balance.
<PAGE>
25
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1997
(Thousands of Dollars)
- -------------------------------------------------------------------------------
DEPARTMENTAL ANALYSIS OF SALARIES
ACCOUNT 920
- -------------------------------------------------------------------------------
DEPARTMENTAL SALARY EXPENSE NUMBER
NAME OF DEPARTMENT INCLUDED IN AMOUNTS BILLED TO PERSONNEL
Indicate each TOTAL PARENT OTHER NON END OF
department or AMOUNT COMPANY ASSOCIATES ASSOCIATES YEAR
service function
- -------------------------------------------------------------------------------
Executive 831 - 831 - 8
Strategic Analysis 285 - 285 - 4
Governmental Affairs 240 - 240 - 3
Vogtle Project and Plant 44,157 - 44,157 - 940
Hatch Project ant Plant 49,808 - 49,808 - 1,000
Farley Project ant Plant 50,132 - 50,132 - 876
Plant Wilson 160 - 160 - -
Technical Services 7,040 - 7,040 - 100
Administrative
Services 8,025 - 8,025 - 139
Corporate General
(Accrual for
incentive pay
plan, etc.) 29,583 - 29,583 - -
------- ----- ------- ----- -----
TOTAL 190,261 - 190,261 - 3,070
------- ----- ------- ----- -----
<PAGE>
26
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1997
(Thousands of Dollars)
- -------------------------------------------------------------------------------
OUTSIDE SERVICES EMPLOYED
ACCOUNT 923
- -------------------------------------------------------------------------------
INSTRUCTIONS: Provide a breakdown by subaccount of outside services employed. If
the aggregate amounts paid to any one payee and included within one subaccount
is less than $100,000, only the aggregate number and amount of all such payments
included within the subaccount need be shown. Provide a subtotal for each type
of service.
- -------------------------------------------------------------------------------
RELATIONSHIP
"A"=
ASSOCIATE
"NA"=NON
FROM WHOM PURCHASED DESCRIPTION ASSOCIATE AMOUNT
- -------------------------------------------------------------------------------
Legal Services
Troutman Sanders LLP Legal fees and services NA 1,407
Arnold & Porter Legal fees regarding DOE Tritium NA 191
Balch & Bingham Legal fees and services NA 1,060
Winston & Strawn Legal fees regarding industry issues NA 162
Four Other Items
(less than $100,000 Aggregate NA 10
paid to other than
Associate Cos.)
2,830
Auditing Services
- -----------------
Two Other Items
(less than $100,000
paid to other than
Associate Cos.) Aggregate NA 75
--
75
--
(Continued on Page 26A)
<PAGE>
<TABLE>
<CAPTION>
26A
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1997
(Thousands of Dollars)
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------
OUTSIDE SERVICES EMPLOYED
ACCOUNT 923
- -------------------------------------------------------------------------------------------
INSTRUCTIONS: Provide a breakdown by subaccount of outside services employed. If
the aggregate amounts paid to any one payee and included within one subaccount
is less than $100,000, only the aggregate number and amount of all such payments
included within the subaccount need be shown. Provide a subtotal for each type
of service.
- -------------------------------------------------------------------------------------------
RELATIONSHIP
"A"=
ASSOCIATE
"NA"=NON
FROM WHOM PURCHASED DESCRIPTION ASSOCIATE AMOUNT
- -------------------------------------------------------------------------------------------
Engineering Services
Southern Company Services Design and general engineering services A 40,066
Electric Power Research
Institute Engineering, research & technical support NA 221
PLG, Inc. Engineering, scientific management and NA 139
consulting services
Nuclear Regulatory
Commission Fees for licensing nuclear plants NA 5,177
Sonic Systems
International Provide system program revisions NA 119
Lambert MacGill
Thomas, Inc. Engineering inspection services NA 117
TLG Service, Inc. Engineering services NA 116
Sixteen Other Items
(less than $100,000 paid
to other than
Associate Cos.) Aggregate NA 291
-----
46,246
Management Consulting Services
Seven Other Items (less than
$100,000 paid to other than
Associate Cos.) Aggregate NA 94
---
94
---
(Continued on page 26B)
- -------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
26B
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1997
(Thousands of Dollars)
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
OUTSIDE SERVICES EMPLOYED
ACCOUNT 923
- -----------------------------------------------------------------------------------------------------------------------
INSTRUCTIONS: Provide a breakdown by subaccount of outside services employed. If
the aggregate amounts paid to any one payee and included within one subaccount
is less than $100,000, only the aggregate number and amount of all such payments
included within the subaccount need be shown. Provide a subtotal for each type
of service.
- -----------------------------------------------------------------------------------------------------------------------
RELATIONSHIP
"A"=
ASSOCIATE
"NA"=NON
FROM WHOM PURCHASED DESCRIPTION ASSOCIATE AMOUNT
- -----------------------------------------------------------------------------------------------------------------------
Other Services
Southern Company Services General services. See Note 3 in the A 17,027
Notes to Financial Statements
Intergrated Technologies, Inc. Computer system services NA 216
One hundred and sixty-eight other items Aggregate NA 824
------
(less than $100,000 paid to other
than Associate Cos.)
18,067
------
TOTAL 67,312
------
</TABLE>
<PAGE>
27
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1997
(Thousands of Dollars)
- -------------------------------------------------------------------------------
EMPLOYEE PENSIONS AND BENEFITS
ACCOUNT 926
- -------------------------------------------------------------------------------
INSTRUCTIONS: Provide a listing of each pension plan and benefit program
provided by the service company. Such listing should be limited to $25,000.
- -------------------------------------------------------------------------------
DESCRIPTION AMOUNT
Pensions 5,855
Employee's Group Insurance 9,451
Post-retirement Life Benefits 1,074
Post-retirement Medical Benefits 4,287
Post-employment Medical Benefits 1,072
Other Employee Benefits 376
Employee Savings Plan Contribution 5,156
--------
TOTAL 27,271
--------
<PAGE>
28
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1997
(Thousands of Dollars)
- -------------------------------------------------------------------------------
GENERAL ADVERTISING EXPENSES
ACCOUNT 930.1
- -------------------------------------------------------------------------------
INSTRUCTIONS: Provide a listing of the amount included in Account 930.1,
"General Advertising Expenses", classifying the items according to the nature of
the advertising and as defined in the account definition. If a particular class
includes an amount in excess of $3000 applicable to a single payee, show
separately the name of the payee and the aggregate amount applicable thereto.
- -------------------------------------------------------------------------------
DESCRIPTION NAME OF PAYEE AMOUNT
- -------------------------------------------------------------------------------
Not Applicable
<PAGE>
29
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1997
(Thousands of Dollars)
- -------------------------------------------------------------------------------
MISCELLANEOUS GENERAL EXPENSES
ACCOUNT 930.2
- -------------------------------------------------------------------------------
INSTRUCTIONS: Provide a listing of the amount included in Account 930.2,
"Miscellaneous General Expenses", classifying such expenses according to their
nature. Payments and expenses permitted by Section 321 (b) (2) of the Federal
Election Campaign Act, as amended by Public Law 94-283 in 1976 (2 U.S.C.S. 441
(b) (2) shall be separately classified.
- -------------------------------------------------------------------------------
DESCRIPTION AMOUNT
- -------------------------------------------------------------------------------
Assessments and Fees 15,406
Membership Dues3,313
Emergency Management 1,447
Nuclear Power Research Expenses 539
Fixed Asset Retirement 148
Employee Communications 34
Employee Activities 31
Management Services 16
Other Expenses 49
-------
TOTAL 20,983
-------
<PAGE>
30
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1997
(Thousands of Dollars)
- -------------------------------------------------------------------------------
RENTS
ACCOUNT 931
- -------------------------------------------------------------------------------
INSTRUCTIONS: Provide a listing of the amount included in Account 931,"Rents",
classifying such expenses by major groupings of property, as defined in the
account definition of the Uniform System of Accounts.
- -------------------------------------------------------------------------------
TYPE OF PROPERTY AMOUNT
- -------------------------------------------------------------------------------
Office Rents 1,143
Computer Equipment and Software Rental 332
-----
TOTAL 1,475
-----
<PAGE>
31
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1997
(Thousands of Dollars)
- -------------------------------------------------------------------------------
TAXES OTHER THAN INCOME TAXES
ACCOUNT 408
- -------------------------------------------------------------------------------
INSTRUCTIONS: Provide an analysis of Account 408, "Taxes Other Than
Income Taxes". Separate the analysis into two groups: (1) other than U.S.
Government taxes, and (2) U.S. Government taxes. Specify each of the various
kinds of taxes and show the amounts thereof. Provide a subtotal for each class
of tax.
- -------------------------------------------------------------------------------
KIND OF TAX AMOUNT
- -------------------------------------------------------------------------------
Other than U.S. Government Taxes
Environmental 2
Property 48
State Unemployment 19
State Franchise 20
------
Subtotal - Other 89
------
U. S. Government Taxes
Federal Insurance Contribution Act 11,524
Federal Unemployment 77
------
Subtotal - U.S. Government 11,601
------
TOTAL 11,690
------
<PAGE>
32
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1997
(Thousands of Dollars)
- -------------------------------------------------------------------------------
DONATIONS
ACCOUNT 426.1
- -------------------------------------------------------------------------------
INSTRUCTIONS: Provide a listing of the amount included in Account 426.1,
"Donations", classifying such expenses by its purpose. The aggregate number
and amount of all items of less than $3,000 may be shown in lieu of details.
- -------------------------------------------------------------------------------
NAME OF RECIPIENT PURPOSE OF DONATION AMOUNT
- -------------------------------------------------------------------------------
American Cancer Association Support of Program 3
American Heart Association Support of Program 5
Auburn University Support of Program 9
Breast Cancer Detection Center Support of Program 18
Junior Achievement of Greater Birmingham Support of Program 4
Scholarship Program Administrators, Inc. Support of Program 14
United Way Support of Program 63
26 Other Items (Less than $3,000) Health & Human Services 25
46 Other Items (Less than $3,000) Employee Matching Gift 11
8 Other Items (Less than $3,000) Educational Contributions 3
10 Other Items (Less than $3,000) Civic & Community 3
1 Other Item (Less than $3,000) Culture & Arts 1
---
TOTAL 159
---
<PAGE>
33
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1997
(Thousands of Dollars)
- ------------------------------------------------------------------------------
OTHER DEDUCTIONS
ACCOUNT 426.5
- ------------------------------------------------------------------------------
INSTRUCTIONS: Provide a listing of the amount included in Account 426.5,
"Other Deductions", classifying such expenses according to their nature.
- ------------------------------------------------------------------------------
DESCRIPTION NAME OF PAYEE AMOUNT
- ------------------------------------------------------------------------------
Civic and Political Activities
Labor, Travel, Membership
Dues and Other Expenses of
Company Employees Various Payees 655
Civic Activities Southern Company Services 30
Legal Fees Balch & Bingham 107
Lobbying Expenses and Training Nuclear Energy Institute 422
Lobbying Expenses Malcolm Wallop 84
Other Civic/Political Various Payees 17
Program Support Southeastern Conference 5
Program Support Auburn University Foundatio 10
Employee Memberships
Membership Dues Greystone Golf Club 50
Membership Dues Robert Trent Jones Golf Club 10
Membership Dues Summit Club 5
Membership Dues Various Associations 6
Other Deductions
Employee Stock Option Plan
Contribution Southern Company Services 792
Deferred Compensation Various Payees 29
EEOC Settlement Southern Company Services 6
Employee Education Reimbursement Alabama Department of Revenue 6
Program Support Bruno's Memorial Classic 5
Program Support New ERA Promotions, Inc 13
Program Support Birmingham Bulls 3
Program Support University of AL at Birmingham 4
Program Support City Stages 7
Program Support University of Alabama 7
Program Support Birmingham Barons 6
Program Support Alabama Symphony Orchestra 3
Meals and Travel Various Payees 47
Educational & Charitable
Contributions Southern Company Services 183
Support of Community Activities and
Programs Various Payees 3
Other Various Payees 27
-----
TOTAL 2,542
-----
<PAGE>
34
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1997
- -------------------------------------------------------------------------------
SCHEDULE XVIII
NOTES TO STATEMENT OF INCOME
- -------------------------------------------------------------------------------
INSTRUCTIONS: The space below is provided for important notes regarding the
statement of income or any account thereof. Furnish particulars as to any
significant increase in services rendered or expenses incurred during the year.
Notes relating to financial statements shown elsewhere in this report may be
indicated here by reference.
- -------------------------------------------------------------------------------
See notes to Financial Statements on pages 19 - 19H.
<PAGE>
35
ANNUAL REPORT OF SOUTHERN NUCLEAR OPERATING COMPANY, INC.
For the Year Ended December 31, 1997
SCHEDULE XIX - FINANCIAL DATA SCHEDULE
(Thousands of Dollars)
If, at the time an annual report on this form is filed, the registrant is
required to submit this report and any amendments thereto electronically via
EDGAR, the registrant shall furnish a Financial Data Schedule. The Schedule
shall set forth the financial and other data specified below that are applicable
to the registrant on a consolidated basis.
Item No. Caption Heading
1. Net Service Company Property 2,633
2. Total Investments 1,604
3. Total Current and Accrued Assets 105,138
4. Total Deferred Debits 29,951
5. Balancing Amount For Total Assets and Other Debits 0
6. Total Assets and Other Debits 139,326
7. Total Proprietary Capital 1,862
8. Total Long-Term Debt 5,000
9. Notes Payable 0
10. Notes Payable to Associate Companies 0
11. Balancing Amount For Total Current and Accrued Liabilities 127,222
12. Total Deferred Credits 3,865
13. Accumulated Deferred Income Taxes 1,377
14. Total Liabilities and Proprietary Capital 139,326
15. Services Rendered to Associate Companies 337,350
16. Services Rendered to Nonassociate Companies 0
17. Miscellaneous Income or Loss 297
18. Total Income 337,647
19. Salaries and Wages 190,261
20. Employee Pensions and Benefits 27,271
21. Balancing Amount For Total Expenses 120,115
22. Total Expenses 337,647
23. Net Income (Loss) 0
24. Total Expenses (Direct Costs) 299,986
25. Total Expenses (Indirect Costs) 37,364
26. Total Expenses (Total) 337,350
27. Number Of Personnel End of Year 3,070
<PAGE>
<TABLE>
<CAPTION>
36
ANNUAL REPORT OF SOUTHERN NUCLEAR OPERATING COMPANY, INC.
December 31, 1997
<S> <C> <C> <C>
President & Chief
Executive Officer
|
Exec Vice
President & Corp
Counsel
- --------------------------------------------------------------------------------------------------
| | | |
Admin Services Federal Nuclear Governmental Technical Services
Vice President Energy Manager Relations Manger Vice President
| |
Comptroller Nuclear Fuel
Treasurer & Manager
Chief Financial
Officer
Employee Inspect & Test
Relations Mgr Svcs Mgr
S&H Manager Reg Eng Env
Svcs Mgr
Security Corp Quality
Manager SVCS Mgr
Records Mgmt & Nuc Tech Svcs
Gen Svcs Supv Gen Mgr
Project Engineer
Public Affairs
Manager
Concerns Prog
Coord
HR Team
Leader*
IR Business
Analyst*
President & Chief
Executive Officer
|
- ------------------------------------------------------------------------------------------------------------
| | | |
Vice President & Exec Vice Human Resources Exec Asst to
Secretary President Nuclear VP Southern Pres/Asst Corp
Company Sec/Treas
- -------------------------------------------------------------------------------------------------------------
| | | |
Strategic Analysis Farley Project Vice Vogtle Project Vice Hatch Project Vice
President President President
Nuc Support Nuc Support Nuc Support
Gen Manager Gen Manager Gen Manager
Safety Audit & Safety Audit & Safety Audit &
Eng Rev Mgr Eng Rev mgr Eng Rev Mgr
Nuclear Plant Nuclear Plant Nuclear Plant
Gen Manger Gen Manager Gen Manager
*SCS Employee
</TABLE>
<PAGE>
37
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1997
- -------------------------------------------------------------------------------
METHODS OF ALLOCATION
- -------------------------------------------------------------------------------
For the descriptions below, the term "plant" means each separate nuclear
electric generating site for which Southern Nuclear is providing services,
regardless of the capacity of the operating units and regardless of the number
of units operating at the site, and the term "plants" means all of such sites.
1. Employee Basis
Southern Nuclear's organization is designed to focus primarily on operation
of each plant. Plant "modules" will be established for each plant in which
will be employed personnel directly responsible for the operation of the
plant, including off-site personnel. All of the cost of employees within a
plant module will be directly charged to the owners of that particular
plant. The Employee Basis for allocation of indirect costs among the plants
shall be the factor for each plant arrived at by dividing the number of
employees in a particular plant module by the total number of employees in
all plant modules. The employee number to be used initially shall be the
initial staffing of the plant modules. In determining the number of
employees after the first year of operations, the average number of
employees in each module during the previous year shall be used.
2. Plant Basis
The Plant Basis for allocation is the factor determined by dividing one
plant by the total number of plants.
3. Plant Capacity Basis
The Plant Capacity Basis for allocation is the factor determined by
dividing the name plate kilowatt capacity of a plant by the total kilowatt
capacity of all plants.
4. Plant Generation Basis
The Plant Generation Basis for allocation shall be the factor for each
plant established by dividing the total net generation output from each
plant in the previous calendar year by the total net generation output of
all plants. With respect to a plant for which Southern Nuclear will begin
providing services during a year, or to a plant having a unit due to be
placed in service in a year to which the allocation will apply, the net
generation output for such plants used for the calculation shall be
adjusted to reflect the expected generation from the unit during the
calendar year.
5. Salary Basis
The Salary Basis for allocation shall be the factor determined by the ratio
of direct salary charges assigned to each plant to the total direct salary
charges for each month.
At this time, the Company utilizes the plant basis for allocation due to its
simplicity and the comparability of amounts billed under this method to those
resulting from the application of the other approved methods.
<PAGE>
38
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1997
- -------------------------------------------------------------------------------
ANNUAL STATEMENT OF COMPENSATION FOR USE OF CAPITAL BILLED
- -------------------------------------------------------------------------------
The following annual statement was supplied to each associate client
company regarding interest billed for compensation of equity capital and
borrowed capital in 1997.
Pursuant to the amended Uniform System of Accounts for Mutual and
Subsidiary Service Companies implemented in January 1980, Southern
Nuclear is required to submit an annual statement to its associated
client companies stating the amount and calculation of interest billed
for compensation of equity capital and borrowed capital.
Southern Nuclear does not bill its associated client companies for
compensation of equity capital.
On December 31, 1990, Southern Nuclear borrowed $5,000,000 from Southern
Company (Southern) for working capital requirements. The interest rate is
adjusted as of the first of each month and applicable to the outstanding
principal on a daily basis. The rate applicable to each month is equal to
the average effective interest cost of Southern's outstanding obligations
for borrowed money on the first day of each month, or if no obligations
are outstanding at the time, at a rate equal to the weekly average of the
thirty-day certificate of deposit rate (secondary market) as reported in
Federal Reserve statistical release H.15 (519) for the next to last
complete business week of the preceding calendar month. However, this
rate shall not exceed the prime rate at Trust Company Bank of Georgia,
Atlanta, Georgia in effect on the first of each month. The interest rate
on these funds ranged from 5.42% to 5.70%. Interest of $282,195.04 was
accrued and billed to the associate client companies. The interest was
distributed to each associate client company on the Plant Allocation
Basis in accordance with the SEC order and our service contracts.
The interest on total company indebtedness was billed to the associate
client companies as follows:
Alabama Power 94,065.33
Georgia Power 188,129.71
----------
282,195.04
----------
<PAGE>
39
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1997
SIGNATURE CLAUSE
Pursuant to the requirements of the Public Utility Holding
Company Act of 1935 and the rules and regulations of the
Securities and Exchange Commission issues thereunder, the
undersigned company has duly caused this report to be signed on
its behalf by the undersigned officer thereunto duly authorized.
Southern Nuclear Operating Company, Inc.
--------------------------------------------------
(Name of Reporting Company)
/s/ K.S. King
By: __________________________________________________
(Signature of Signing Officer)
K.S. King, Comptroller, Treasurer and Chief Financial Officer
-------------------------------------------------------------
(Printed Name and Title of Signing Officer)
Date: April 28, 1998
