Form U-13-60
Mutual and Subsidiary Service Companies
Revised February 7, 1980
ANNUAL REPORT
FOR THE PERIOD
Beginning January 1, 1998 and Ending December 31, 1998
-------------- -----------------
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
--------
Location of Principal Executive Office 40 Inverness Center Parkway
of Reporting Company Birmingham, Alabama 35242
---------------------------
Name, title, and address of
officer to whom correspondence concerning
this report should be addressed:
Comptroller, Treasurer, 40 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 25
OUTSIDE SERVICES EMPLOYED 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> 4
<TABLE>
<CAPTION>
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1998
(Thousands of Dollars)
- ---------------------------------------------------------------------------------------------------
SCHEDULE I - COMPARATIVE BALANCE SHEET
Give balance sheet of the Company as of December 31 of the current and prior year.
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ACCOUNT ASSETS AND OTHER DEBITS AS OF DECEMBER 31
CURRENT PRIOR
- ---------------------------------------------------------------------------------------------------
SERVICE COMPANY PROPERTY
101 Service company property (Schedule II) 10,932 11,555
107 Construction work in progress (Schedule II) - -
-------- --------
Total Property 10,932 11,555
-------- --------
108 Less accumulated provision for depreciation
and amortization of service company property (Schedule III) 9,100 8,922
-------- --------
Net Service Company Property 1,832 2,633
-------- --------
INVESTMENTS
123 Investments in associate companies (Schedule IV) - -
124 Other investments (Schedule IV) 1,461 1,604
-------- --------
Total Investments 1,461 1,604
-------- --------
CURRENT AND ACCRUED ASSETS
131 Cash - 147
134 Special deposits - -
135 Working funds 111 107
136 Temporary cash investments (Schedule IV) 3,535 2,000
141 Notes receivable - -
143 Accounts receivable 75 52
144 Accumulated provision for uncollectible accounts - -
146 Accounts receivable from associate companies (Schedule V) 111,783 102,706
152 Fuel stock expenses undistributed (Schedule VI) - -
154 Materials and supplies - -
163 Stores expense undistributed (Schedule VII) - -
165 Prepayments 2,467 3,967
171 Interest and dividend receivable 21 -
174 Miscellaneous current and accrued assets (Schedule VIII) - -
-------- --------
Total Current and Accrued Assets 117,992 108,979
-------- --------
DEFERRED DEBITS
181 Unamortized debt expense - -
184 Clearing accounts - -
186 Miscellaneous deferred debits (Schedule IX) 345 296
188 Research, development, or demonstration
expenditures (Schedule X) - -
190 Accumulated deferred income taxes 30,771 24,437
-------- --------
Total Deferred Debits 31,116 24,733
-------- --------
TOTAL ASSETS AND OTHER DEBITS 152,401 137,949
------- -------
- ---------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
5
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1998
(Thousands of Dollars)
- ---------------------------------------------------------------------------------------------------
SCHEDULE I - COMPARATIVE BALANCE SHEET
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
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) 2,039 1,852
215 Appropriated retained earnings (Schedule XI) - -
216 Unappropriated retained earnings (Schedule XI) - -
-------- --------
Total Proprietary Capital 2,049 1,862
-------- --------
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
-------- --------
OTHER NONCURRENT LIABILITIES
228 Accumulated provision for pensions and benefits 66,124 55,077
-------- ------
CURRENT AND ACCRUED LIABILITIES
231 Notes payable - -
232 Accounts payable 11,314 13,801
233 Notes payable to associate companies (Schedule XIII) - -
234 Accounts payable to associate companies (Schedule XIII) 18,752 13,780
236 Taxes accrued 1,443 5,504
237 Interest accrued - 72
238 Dividends declared - -
241 Tax collections payable 6 4
242 Miscellaneous current and accrued liabilities (Schedule XIII) 43,112 38,466
-------- --------
Total Current and Accrued Liabilities 74,627 71,627
-------- --------
DEFERRED CREDITS
253 Other deferred credits 4,601 4,383
255 Accumulated deferred investment tax credits - -
-------- --------
Total Deferred Credits 4,601 4,383
-------- --------
282 ACCUMULATED DEFERRED INCOME TAXES - -
--------------------------------- -------- --------
TOTAL LIABILITIES AND PROPRIETARY CAPITAL 152,401 137,949
-------- --------
- ---------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
6
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1998
(Thousands of Dollars)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SCHEDULE II - SERVICE COMPANY PROPERTY
- --------------------------------------------------------------------------------------------------------------------
BALANCE AT RETIREMENTS OTHER BALANCE
BEGINNING ADDITIONS OR CHANGES AT
DESCRIPTION OF YEAR SALES 1/ CLOSE OF
YEAR
- --------------------------------------------------------------------------------------------------------------------
SERVICE COMPANY PROPERTY
Account
301 ORGANIZATION - - - - -
303 MISCELLANEOUS
INTANGIBLE
PLANT - - - - -
304 LAND & LAND
RIGHTS - - - - -
305 STRUCTURES AND
IMPROVEMENTS - - - - -
306 LEASEHOLD
IMPROVEMENTS 1,539 - - - 1,539
307 EQUIPMENT 2/ 4,738 70 669 - 4,139
308 OFFICE
FURNITURE AND
EQUIPMENT 2/ 4,212 91 43 - 4,260
309 AUTOMOBILES,
OTHER
VEHICLES, AND
RELATED GARAGE
EQUIPMENT - - - - -
310 AIRCRAFT AND
AIRPORT
EQUIPMENT - - - - -
311 OTHER SERVICE
COMPANY
PROPERTY 3/ 1,066 - 72 - 994
------ --- --- --- ------
SUB-TOTAL 11,555 161 784 - 10,932
------ --- --- --- ------
107 CONSTRUCTION
WORK IN
PROGRESS - - - - -
------ --- --- --- ------
TOTAL 11,555 161 784 - 10,932
------ --- --- --- ------
() Denotes red figure
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
7
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1998
(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 69 3,858
Mainframe Computer Equipment 83
Office Automation Equipment - 2
Telecommunication Equipment 1 196
-- -----
70 4,139
-- -----
OFFICE FURNITURE AND EQUIPMENT
Office Furniture and Equipment 33 2,274
Miscellaneous Equipment 58 1,986
-- -----
91 4,260
-- -----
- --------------------------------------------------------------------------
3/ DESCRIBE OTHER SERVICE COMPANY PROPERTY:
Computer software and licenses.
- --------------------------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
8
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1998
(Thousands of Dollars)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
SCHEDULE III
ACCUMULATED PROVISION FOR DEPRECIATION AND
AMORTIZATION OF SERVICE COMPANY PROPERTY
- ---------------------------------------------------------------------------------------------------------------------------
BALANCE AT ADDITIONS OTHER BALANCE AT
BEGINNING CHARGED TO CHANGES CLOSE OF
DESCRIPTION OF YEAR ACCOUNT RETIREMENTS ADD YEAR
403 (DEDUCT)
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 2,842 676 597 - 2,921
308 OFFICE
FURNITURE AND
EQUIPMENT 3,490 199 41 - 3,648
309 AUTOMOBILES,
OTHER
VEHICLES, AND
RELATED
GARAGE
EQUIPMENT - - - - -
310 AIRCRAFT AND
AIRPORT
EQUIPMENT - - - - -
311 OTHER SERVICE
COMPANY
PROPERTY 1,051 13 72 - 992
----- ---- --- ---- ------
TOTAL 8,922 888 710 - 9,100
----- --- --- ---- ------
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
1/ PROVIDE AN EXPLANATION OF THOSE CHANGES CONSIDERED MATERIAL:
None
<PAGE>
9
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1998
(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/Retiree Energy Loans 1,168 896
Employee Computer Loans 436 565
----- -----
1,604 1,461
----- -----
ACCOUNT 136 - TEMPORARY CASH INVESTMENTS
Money Market Mutual Funds 2,000 3,535
----- -----
TOTAL 3,604 4,996
----- -----
- ------------------------------------------------------------------------------
<PAGE>
10
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1998
(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 1,158 1,139
Alabama Power 41,951 47,833
Georgia Power 59,556 62,795
Gulf Power 1 -
Southern Company Energy Solutions 4 -
Savannah Electric 3 1
Southern Energy 33 15
------- -------
TOTAL 102,706 111,783
------- -------
- -------------------------------------------------------------------------------
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, 1998
(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, 1998
(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, 1998
(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
Not Applicable
<PAGE>
14
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1998
(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 23 -
Undistributed Labor Accrual 120 42
Undistributed Foreign Withholding Employee Taxes 73 58
Undistributed FICA Tax - 238
Personal Access Data System-1996 Assessment 75 -
Sundry Delayed (2 items) 5 7
--- ---
Total 296 345
--- ---
<PAGE>
15
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1998
(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
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1998
(Thousands of Dollars)
- -----------------------------------------------------------------------------------------------------------------------------
SCHEDULE XI - PROPRIETARY CAPITAL
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
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 1,049
ACCOUNT 215 - APPROPRIATED RETAINED EARNINGS -
-----
TOTAL 2,039
-----
- -----------------------------------------------------------------------------------------------------------------------------
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
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1998
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
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 ADDITION DEDUCTIONS 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, 1998
(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 1,646 1,828
Georgia Power 5,301 5,664
Southern Company Services 6,833 11,260
------ ------
TOTAL 13,780 18,752
------ ------
- ------------------------------------------------------------------------------
ACCOUNT 242 - MISCELLANEOUS CURRENT AND ACCRUED
LIABILITIES
Employee Stock Option Plan Contribution 794 857
Vacation Pay Accrual 13,483 14,179
Performance Pay Plan Accrual 16,740 18,857
Productivity Improvement Plan Accrual 7,110 8,650
Performance Dividend Plan - 130
Worker's Compensation Awards 339 439
------ ------
TOTAL 38,466 43,112
------ ------
<PAGE>
19
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1998
- -------------------------------------------------------------------------------
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
support Plant Hatch and Plant Vogtle and with Alabama Power to support
Plant Farley.
Effective January 1, 1998, the Company adopted the Federal Energy
Regulatory Commission's (FERC) Uniform System of Accounts. Prior to 1998,
the Company followed the SEC's Uniform System of Accounts for Mutual
Service Companies and Subsidiary Service Companies. In December 1998, the
Company made an entry to reclassify certain 242 accounts to 228 accounts
and 253 accounts, and to reclassify 174 accounts to 171 accounts. Previous
year's amount have been restated accordingly.
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. 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.
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, 1998 and 1997.
<PAGE>
19A
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1998
- -------------------------------------------------------------------------------
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.
- -------------------------------------------------------------------------------
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 lives 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.
Pending Accounting Pronouncements
---------------------------------
The AICPA has issued Statements of Position 98-1, Accounting for the Costs
of Computer Software Developed or Obtained for Internal Use. This
statement requires capitalization of external direct costs of materials
and services; payroll and payroll-related costs for employees directly
associated; and interest costs during development of computer software for
internal use (planning and preliminary costs should be expensed). Also,
capitalized costs of computer software developed or obtained for internal
use should be amortized on a straight-line basis unless another systematic
and rational basis is more representative of the software's use. This
statement is effective for financial statements for fiscal years beginning
after December 15, 1998 and is not expected to have a material effect on
the Company's financial statements.
2. RETIREMENT BENEFITS
-------------------
The Company has a defined benefit, trusteed, pension plan that covers
substantially all regular employees. The Company provides certain medical
care and life insurance benefits for retired employees. Substantially all
employees may become eligible for such benefits when they retire. The
Company funds trusts to the extent deductible under federal income tax
regulations. In 1998, the Company adopted Financial Accounting Standards
Board (FASB) Statement No. 132 Employers' Disclosure about Pensions and
Other Postretirement Benefits.
<PAGE>
19B
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1998
- -------------------------------------------------------------------------------
SCHEDULE XIV
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
INSTRUCTIONS: The space below is provided for important notes
regarding the financial statements or any account
thereof. Furnish particulars as to any significant
contingent assets or liabilities existing at the end of
the year. Notes relating to financial statements shown
elsewhere in this report may be indicated here by
reference.
- ------------------------------------------------------------------------------
Pension Plans
-------------
Changes during the year in the projected benefit obligations and in the
fair value of plan assets were as follows:
Projected
Benefits Obligations
--------------------
1998 1997
---- ----
(In thousands)
Balance at beginning of year $ 187,068 $ 80,879
Service cost 11,926 9,464
Interest cost 14,000 11,187
Benefits paid (1,391) (794)
Actuarial (gain) loss 9,928 (1,961)
Spinoff/curtailment - 88,293
--------- --------
Balance end of year $ 221,531 $187,068
--------- --------
Plan Assets
-----------
1998 1997
---- ----
(In thousands)
Balance at beginning of year $ 259,633 $ 72,163
Return on plan assets 1,357 13,962
Employer contributions - 5,836
Benefits paid (1,391) (794)
Receivables/payables due to transfers 575 168,466
--------- ---------
Balance end of year $ 260,174 $ 259,633
--------- ---------
The accrued pension costs recognized in the Comparative Balance Sheet were as
follows:
1998 1997
---- ----
(In thousands)
Funded status $ 38,643 $ 72,566
Unrecognized transition obligation (4,748) (5,395)
Unrecognized prior service cost 5,248 5,658
Unrecognized net gain (56,284) (85,715)
---------- ----------
Accrued liability recognized in the
Comparative Balance Sheets $ (17,141) $ (12,886)
---------- ----------
<PAGE>
19C
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1998
- -------------------------------------------------------------------------------
SCHEDULE XIV
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
INSTRUCTIONS: The space below is provided for important notes
regarding the financial statements or any account
thereof. Furnish particulars as to any significant
contingent assets or liabilities existing at the end of
the year. Notes relating to financial statements shown
elsewhere in this report may be indicated here by
reference.
- -------------------------------------------------------------------------------
Components of the plans' net cost were as follows:
1998 1997 1996
---- ---- ----
(In thousands)
Service cost $ 11,926 $ 9,464 $ 4,656
Interest cost 14,000 11,187 5,733
Expected return on plan assets (19,046) (13,249) (4,859)
Recognized net gain (2,388) (1,935) (674)
Net amortization (237) (219) (187)
--------- -------- --------
Net pension cost (income) $ 4,255 $ 5,248 $ 4,669
--------- -------- --------
The weighted average rates assumed in the actuarial calculations for both
the pension plans and postretirement benefits were:
1998 1997
---- ----
Discount 6.75% 7.50%
Annual salary increase 4.25% 5.00%
Long-term return on plan assets 8.50% 8.50%
Postretirement Benefits
-----------------------
Changes during the year in the projected benefit obligations and in the fair
value of plan assets were as follows:
Projected
Benefit Obligations
-------------------
1998 1997
---- ----
(In thousands)
Balance at beginning of year $51,506 $22,278
Service cost 2,258 1,869
Interest cost 3,841 3,105
Benefits paid (465) (264)
Actuarial (gain) loss 6,740 (440)
Spinoff/curtailment - 24,958
------- -------
Balance end of year $63,880 $51,506
------- -------
<PAGE>
19D
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1998
- ------------------------------------------------------------------------------
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.
- -------------------------------------------------------------------------------
Plan Assets
1998 1997
---- -----
(In thousands)
Balance at beginning of year $ - $ -
Return on plan assets - -
Employer contributions 465 264
Benefits paid (465) (264)
------ ------
Balance end of year $ - $ -
------ ------
The accrued postretirement costs recognized in the Comparative Balance
Sheet were as follows:
1998 1997
---- ----
(In thousands)
Funded status $(63,880) $(51,506)
Unrecognized transition obligation 7,788 8,307
Unrecognized prior service cost (2,667) (2,826)
Unrecognized net loss 12,677 6,113
--------- --------
Accrued liability recognized in the
Comparative Balance Sheets $(46,082) $(39,912)
-------- --------
Components of the plans' net cost were as follows:
1998 1997 1996
---- ---- ----
(In thousands)
Service cost $ 2,258 $ 1,869 $ 987
Interest cost 3,841 3,105 1,490
Expected return on plan assets - - -
Recognized net gain 156 156 164
Net amortization 360 230 (159)
------- ------- -------
Net postretirement cost $ 6,615 $ 5,360 $ 2,482
------- -------- -------
An additional assumption used in measuring the accumulated postretirement
benefit obligation was a weighted average medical care cost trend rate of 8.30
percent for 1998, decreasing gradually to 4.75 percent through the year 2005,
and remaining at that level thereafter. An annual increase or decrease in the
assumed medical care cost trend rate of 1 percent would affect the accumulated
benefit obligation and the service and interest cost components at December 31,
1998 as follows:
1 Percent 1 Percent
Increase Decrease
-------- ----------
(In thousands)
Benefit obligation $4,137 $3,446
Service and interest costs 394 327
<PAGE>
19E
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1998
- ------------------------------------------------------------------------------
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.
- ------------------------------------------------------------------------------
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.
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.
<PAGE>
19F
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1998
- -------------------------------------------------------------------------------
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.
- -------------------------------------------------------------------------------
5. INCOME TAXES
------------
Details of the federal and state income tax provisions (benefits) are as
follows (Note 1):
1998 1997
---- ----
(In thousands)
Total provision for income taxes:
Federal --
Currently payable $ 3,623 $ 5,891
Deferred - Current year (3,777) (9,141)
- Reversal of prior years 423 3,036
-------- -------
269 (214)
-------- -------
State --
Currently payable 109 1,160
Deferred - Current Year (1,170) (1,238)
- Reversal of prior years 584 418
-------- ---
(477) 340
-------- -------
Federal and state income taxes charged
(credited) to operations $ (208) $ 126
-------- -------
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:
1998 1997
---- ----
(In thousands)
Deferred tax liabilities:
Pensions and other benefits $ (1,635) $ (1,268)
Other (91) (109)
--------- --------
Total (1,726) (1,377)
--------- --------
Deferred tax assets:
Pensions and other benefits 32,383 29,078
Other 1,785 577
--------- --------
Total 34,168 29,655
--------- --------
Net deferred tax assets 32,442 28,278
Portion included in current assets (1,671) (3,841)
--------- --------
Accumulated deferred income taxes
in the comparative balance sheets $ 30,771 $ 24,437
--------- --------
<PAGE>
19G
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1998
- -------------------------------------------------------------------------------
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.
- ------------------------------------------------------------------------------
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 which have been allocated to the
Company, and the nondeductible portion of various expenses.
6. RENTS
-----
The Company subleases its office space from an affiliated company on a
month-to-month basis. Current monthly billing is approximately $96,850.
7. OUTSIDE SERVICES
----------------
The Company incurred expenses of approximately $81 million and $63 million
for 1998 and 1997, respectively, associated with services provided by SCS
(see Note 3 for description of services provided).
<PAGE>
20
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1998
(Thousands of Dollars)
- -------------------------------------------------------------------------------
SCHEDULE XV - STATEMENT OF INCOME
- -------------------------------------------------------------------------------
ACCOUNT DESCRIPTION CURRENT PRIOR
YEAR YEAR
- -------------------------------------------------------------------------------
INCOME
457 Services rendered to associate companies 407,101 337,350
458 Services rendered to nonassociate companies - -
419 Interest and dividend income 312 297
-------- -------
TOTAL INCOME 407,413 337,647
-------- -------
EXPENSE
500-559 Power production 290,401 242,765
560-579 Transmission 298 280
920 Salaries and wages 11,470 18,038
921 Office supplies and expenses 2,662 5,305
922 Administrative expense transferred - credit - -
923 Outside services employed 39,070 18,499
924 Property insurance 216 217
925 Injuries and damages 282 503
926 Employee pensions and benefits 29,709 26,820
928 Regulatory commission expense - -
930.1 General advertising expenses - -
930.2 Miscellaneous general expenses 316 830
931 Rents 1,706 1,467
935 Maintenance of structures and equipment 801 1,597
403 Depreciation and amortization expense 888 1,256
408 Taxes other than income taxes 14,668 11,555
409 Income taxes 3,732 7,051
410 Provision for deferred income taxes 3,380 4,437
411 Provision for deferred income taxes - credit (7,320) (11,362)
411.5 Investment tax credit - -
426.1 Donations 326 159
426.5 Other deductions 3,057 2,579
427 Interest on long-term debt - -
430 Interest on debt to associate companies 283 282
431 Other interest expense 197 3
107 Construction work in process 11,272 5,338
186 Miscellaneous deferred debits (1) 28
------- -------
TOTAL EXPENSE 407,413 337,647
------- -------
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, 1998
(Thousands of Dollars)
- -------------------------------------------------------------------------------
ANALYSIS OF BILLING
ASSOCIATE COMPANIES
ACCOUNT 457
- -------------------------------------------------------------------------------
DIRECT DIRECT COMPENSATION TOTAL
NAME OF ASSOCIATE COMPANY COSTS COSTS FOR USE OF AMOUNT
CHARGED CHARGED CAPITAL BILLED
------- ------- --------- ------
457-1 457-2 457-3
- -------------------------------------------------------------------------------
Alabama Power 120,966 16,208 94 137,268
Georgia Power 236,839 32,416 188 269,443
Gulf Power 5 - - 5
Mississippi Power 3 - - 3
Savannah Electric 45 - - 45
Southern Company Services 140 - - 140
Southern Energy 171 - - 171
Other Associated Companies 8 - - 8
Southern Company Generation 18 - - 18
-------- ------- ------ -------
TOTAL 358,195 48,624 282 407,101
------- ------- ------ -------
<PAGE>
<TABLE>
<CAPTION>
22
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1998
(Thousands of Dollars)
- ---------------------------------------------------------------------------------------------
ANALYSIS OF BILLING
NONASSOCIATE COMPANIES
ACCOUNT 458
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
DIRECT INDIRECT COMPENSATION EXCESS TOTAL
COST COST FOR USE TOTAL OR AMOUNT
NAME OF NONASSOCIATE CHARGED OF CAPITAL COST DEFICIENCY BILLED
------- ---------- ---- ---------- ------
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, 1998
(Thousands of Dollars)
- ----------------------------------------------------------------------------------------------------------------------------------
SCHEDULE XVI
ANALYSIS OF CHARGES FOR SERVICE
ASSOCIATE AND NONASSOCIATE COMPANIES
- ----------------------------------------------------------------------------------------------------------------------------------
INSTRUCTIONS: Total cost of service will equal for associate and nonassociate companies, the total amount billed under their
separate analysis of billing schedules.
- ----------------------------------------------------------------------------------------------------------------------------------
ASSOCIATE COMPANY NONASSOCIATE COMPANY TOTAL CHARGES
CHARGES CHARGES FOR SERVICE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
DESCRIPTION OF ITEMS DIRECT INDIRECT DIRECT INDIRECT DIRECT INDIRECT
COST COST TOTAL COST COST TOTAL COST COST TOTAL
- ----------------------------------------------------------------------------------------------------------------------------------
500-559 POWER PRODUCTION 279,729 10,672 290,401 - - - 279,729 10,672 290,401
560-579 TRANSMISSION 298 - 298 - - - 298 - 298
920 SALARIES AND WAGES 4,113 7,357 11,470 - - - 4,113 7,357 11,470
921 OFFICE SUPPLIES AND
EXPENSES 3,325 (663) 2,662 - - - 3,325 (663) 2,662
922 ADMINISTRATIVE EXPENSE
TRANSFERRED - CREDIT - - - - - - - - -
923 OUTSIDE SERVICES EMPLOYED 16,638 22,432 39,070 - - - 16,638 22,432 39,070
924 PROPERTY INSURANCE - 216 216 - - - - 216 216
925 INJURIES AND DAMAGES 235 47 282 - - - 235 47 282
926 EMPLOYEE PENSIONS AND BENEFITS 27,295 2,414 29,709 - - - 27,295 2,414 29,709
928 REGULATORY COMMISSION EXPENSE - - - - - - - - -
930.1 GENERAL ADVERTISING EXPENSES - - - - - - - - -
930.2 MISCELLANEOUS GENERAL EXPENSES 170 146 316 - - - 170 146 316
931 RENTS 357 1,349 1,706 - - - 357 1,349 1,706
935 MAINTENANCE OF STRUCTURES AND
EQUIPMENT 705 96 801 - - - 705 96 801
403 DEPRECIATION AND AMORTIZATION
EXPENSE 148 740 888 - - - 148 740 888
408 TAXES OTHER THAN INCOME TAXES 13,613 1,055 14,668 - - - 13,613 1,055 14,668
409 INCOME TAXES 3,940 (208) 3,732 - - - 3,940 (208) 3,732
410 PROVISION FOR DEFERRED INCOME
TAXES 3,380 - 3,380 - - - 3,380 - 3,380
411 PROVISION FOR DEFERRED INCOME
TAXES - CREDIT (7,320) - (7,320) - - - (7,320) - (7,320)
411.5 INVESTMENT TAX CREDIT - - - - - - - - -
426.1 DONATIONS 7 319 326 - - - 7 319 326
426.5 OTHER DEDUCTIONS 291 2,766 3,057 - - - 291 2,766 3,057
427 INTEREST ON LONG - TERM DEBT - - - - - - - - -
430 INTEREST ON DEBT TO ASSOCIATE
COMPANIES - 283 283 - - - - 283 283
431 OTHER INTEREST EXPENSE - 197 197 - - - - 197 197
107 CONSTRUCTION WORK IN PROGRESS 11,272 - 11,272 - - - 11,272 - 11,272
186 MISCELLANEOUS DEFERRED - DEBITS (1) - (1) - - - (1) - (1)
SUB-TOTAL EXPENSES 358,195 49,218 407,413 - - - 358,195 49,218 407,413
419 INTEREST AND DIVIDEND INCOME - (312) (312) - - - - (312) (312)
TOTAL COST OF SERVICE 358,195 48,906 407,101 - - - 358,195 48,906 407,101
( ) Denotes deficit or credit balance.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
24
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1998
(Thousands of Dollars)
- -----------------------------------------------------------------------------------------------------------------------------------
SCHEDULE XVII
SCHEDULE OF EXPENSE DISTRIBUTION
BY
DEPARTMENT OR SERVICE FUNCTION
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
DEPARTMENT OR SERVICE FUNCTION
DESCRIPTION Total Exec- Strategic Corp- Gover- Vogtle Hatch Farley Plant Tech- Admin- Corporate
Amount tive Analysis orate mental Pro- Pro- Pro- Wilson nical istrative General
Council Affairs ject ject ject ervices Services
& & & &
Compliance Plant Plant Plant
- ----------------------------------------------------------------------------------------------------------------------------------
500-599 POWER
PRODUCTION 290,401 1,643 379 - 36 75,993 85,826 85,002 433 13,936 3 27,150
560-579 TRANSMISSION 298 - - - - - - 267 - - - 31
920 SALARIES AND
WAGES 11,470 298 - 67 153 - - - - 3 7,889 3,060
921 OFFICE
SUPPLIES
AND
EXPENSES 2,662 74 - 5 32 4 1 5 - 68 2,344 129
922 ADMINISTRATIVE
EXPENSE
TRANSFERRED
-CREDIT - - - - - - - - - - - -
923 OUTSIDE
SERVICES
EMPLOYED 39,070 19 11 1,536 89 1 (3) - - 261 18,194 18,962
924 PROPERTY
INSURANCE 216 - - - - - - - - - - 216
925 INJURIES AND
DAMAGES 282 - - - - - - - - - - 282
926 EMPLOYEE
PENSIONS
AND
BENEFITS 29,709 - - - - 10 6 29 - 2 175 29,487
928 REGULATORY
COMMISSION
EXPENSE - - - - - - - - - - - -
930.1 GENERAL
ADVERTISING
EXPENSE - - - - - - - - - - - -
930.2 MISCELLANEOUS
GENERAL
EXPENSES 316 23 - - 4 - - 1 - 160 72 56
931 RENTS 1,706 - - - - - - - - - 357 1,349
935 MAINTENANCE
OF
STRUCTURES
AND
EQUIPMENT 801 - - - - - - - - - 801 -
403 DEPRECIATION
AND
AMORTIZATION
EXPENSE 888 - - - - - - - - - - 888
408 TAXES OTHER
THAN
INCOME
TAXES 14,668 - - - - - - - - - - 14,668
409 INCOME
TAXES 3,732 - - - - - - - - - - 3,732
410 PROVISION
FOR
DEFERRED
INCOME
TAXES 3,380 - - - - - - - - - - 3,380
411 PROVISION
FOR
DEFERRED
INCOME TAXES
-CREDIT (7,320) - - - - - - - - - - (7,320)
411.5 INVESTMENT
TAX CREDIT - - - - - - - - - - - -
426.1 DONATIONS 326 320 - - - 2 4 - - - - -
426.5 OTHER
DEDUCTIONS 3,057 1,148 - - 777 7 - 5 - 8 16 1,096
427 INTEREST ON
LONG-TERM
DEBT - - - - - - - - - - - -
430 INTEREST ON
DEBT
TO
ASSOCIATE
COMPANIES 283 - - - - - - - - - - 283
431 OTHER
INTEREST
EXPENSE 197 - - - - - - - - - - 197
107 CONSTRUCTION
WORK
IN PROGRESS 11,272 - - - - 971 3,726 3,257 1 1,929 - 1,388
186 MISCELLANEOUS
DEFERRED
DEBITS (1) - - - (1) - - - - - - -
TOTAL EXPENSES 407,413 3,525 390 1,608 1,090 76,988 89,560 88,566 434 16,367 29,851 99,034
419 INTEREST AND
DIVIDEND
INCOME (312) - - - - - - - - - - (312)
- ----------------------------------------------------------------------------------------------------------------------------------
INSTRUCTION: Indicate each department or service function. (see Instruction 01-3 General Structure of Accounting System:
Uniform System of Account).
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL COSTS = 407,101 3,525 390 1,608 1,090 76,988 89,560 88,566 434 16,367 29,851 98,722
- -----------------------------------------------------------------------------------------------------------------------------------
( ) Denotes deficit or credit balance
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
25
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1998
(Thousands of Dollars)
- ------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL ANALYSIS OF SALARIES
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
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 981 - 981 - 7
Strategic Analysis 277 - 277 - 3
Corporate Counsel
& Compliance 64 - 64 - 2
Governmental Affairs 387 - 387 - 3
Vogtle Project and Plant 55,667 - 55,667 - 935
Hatch Project ant Plant 61,047 - 61,047 - 980
Farley Project ant Plant 55,583 - 55,583 - 874
Plant Wilson 427 - 427 - -
Technical Services 7,237 - 7,237 - 109
Administrative Services 7,910 - 7,910 - 141
Corporate General
(Accrual for
incentive pay
plan, etc.) 29,633 - 29,633 - -
-------- ---- -------- ----- ------
TOTAL 219,213 - 219,213 - 3,054
------- ---- ------- ----- -----
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
26
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1998
(Thousands of Dollars)
- ---------------------------------------------------------------------------------------------------------
OUTSIDE SERVICES EMPLOYED
- ---------------------------------------------------------------------------------------------------------
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.
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
RELATIONSHIP
"A"=
ASSOCIATE
"NA"=NON
FROM WHOM PURCHASED DESCRIPTION ASSOCIATE AMOUNT
- ---------------------------------------------------------------------------------------------------------
Legal Services
Balch & Bingham , LLP Legal fees and services NA 1,384
Troutman Sanders, LLP Legal fees and services NA 760
Winston & Strawn Legal fees regarding industry issues NA 262
Arnold & Porter Legal fees regarding DOE Tritium NA 142
Gordon, Silberman, Wiggins & Childs Legal fees NA 130
5 Other Items (less than $100,000) Aggregate NA 81
------
2,759
------
Auditing Services
Arthur Andersen, LLP Auditing services NA 108
------
108
------
Engineering Services
Southern Company Services Design and general engineering services A 48,435
Nuclear Regulatory Commission Fees for licensing nuclear plants NA 6,628
Sonic Systems International, Inc. Provide system program revisions NA 593
Electric Power Research Institute Engineering, research & technical support NA 292
PLG, Inc. Engineering, scientific management and NA 182
consulting services
BCP Technical Services, Inc. Engineering services NA 123
Lambert MacGill Thomas, Inc. Engineering inspection services NA 101
Westinghouse Electric Corporation Engineering services NA (533)
13 Other Items (less than $100,000) Aggregate NA 302
------
56,123
------
Management Consulting Services
7 Other Items (less than $100,000) Aggregate NA 117
------
117
------
(Continued on Page 26A)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
26A
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1998
(Thousands of Dollars)
- -------------------------------------------------------------------------------------------------------------------
OUTSIDE SERVICES EMPLOYED
- -------------------------------------------------------------------------------------------------------------------
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.
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
RELATIONSHIP
"A"=
ASSOCIATE
"NA"=NON
FROM WHOM PURCHASED DESCRIPTION ASSOCIATE AMOUNT
- -------------------------------------------------------------------------------------------------------------------
Other Services
Southern Company Services General services. See Note 3 in the A 30,659
Notes to Financial Statements
Datastream Systems, Inc. Computer Services NA 3,925
GTS Duratek Health Physics Services NA 1,474
Black and Veatch, LLP Consulting NA 893
Science Applications International Corp. Computer Services NA 571
Intergrated Technologies, Inc. Computer system services NA 318
Alabama Power Mail and electricity services A 282
National Inspection and Consultants Outage Technical services NA 216
Chem Nuclear Systems, LLC Radwaste Services NA 186
Jeffcoat Associates, L.P. Building Maintenance NA 155
Wells Fargo Guard Services Guard Services NA 143
Pritchard Industries, S. E., Inc. Janitorial Services NA 129
Grace Computer Resources, Inc. Computer Services NA 120
199 Other Items (less than $100,000) Aggregate NA 1,106
-------
40,177
-------
TOTAL 99,284
-------
</TABLE>
<PAGE>
27
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1998
(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 5,110
Employee's Group Insurance 11,217
Post-Retirement Life Benefits 1,304
Post-Retirement Medical Benefits 5,311
Post-Employment Medical Benefits 74
Other Employee Benefits 682
Employee Savings Plan Contribution 6,011
-------
TOTAL 29,709
-------
<PAGE>
28
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1998
(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, 1998
(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
- -------------------------------------------------------------------------------
Association Dues and Assessments 30
Nuclear Power Research Expenses 149
Fixed Asset Retirement 66
Employee Communications 30
Other Expenses 41
----
TOTAL 316
----
<PAGE>
30
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1998
(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 Building 1,186
Copiers 150
Warehouse Storage 13
Computer Equipment and Software 357
-----
TOTAL 1,706
-----
<PAGE>
31
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1998
(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
--------------------------------
Property 53
State Unemployment 81
State Franchise 15
------
Subtotal - Other 149
------
U. S. Government Taxes
----------------------
Federal Insurance Contribution Act 14,340
Federal Unemployment 179
------
Subtotal - U.S. Government 14,519
------
TOTAL 14,668
------
<PAGE>
32
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1998
(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 4
American Red Cross Support of Program 7
American Nuclear Support of Program 5
Auburn University Support of Program 35
Birmingham Festival Support of Program 5
Breast Cancer Detection Center Support of Program 10
Georgia State University Support of Program 25
Georgia Tech Research Corporation Support of Program 53
Junior Achievement of Greater Birmingham Support of Program 6
Scholarship Program Administrators, Inc. Support of Program 33
University of Alabama Support of Program 5
University of Florida Support of Program 10
United Way Support of Program 67
34 Other Items (Less than $3,000) Health & Human Services 28
48 Other Items (Less than $3,000) Employee Matching Gift 18
9 Other Items (Less than $3,000) Educational Contributions 7
9 Other Items (Less than $3,000) Civic & Community 7
1 Other Item (Less than $3,000) Culture & Arts 1
---
TOTAL 326
---
<PAGE>
<TABLE>
<CAPTION>
33
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1998
(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.
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
DESCRIPTION NAME OF PAYEE AMOUNT
- -----------------------------------------------------------------------------------------------------
Expenditures for Certain Civic, Political, & Company, employee and administrative
Related Activities costs 1,106
Employee Stock Option Plan Contribution Southern Company Services 850
Educational and Charitable Contributions Southern Company Services 562
Employee Membership Dues Various Payees 225
Other Miscellaneous Deductions Company expenses 314
------
TOTAL 3,057
------
</TABLE>
<PAGE>
34
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1998
- -------------------------------------------------------------------------------
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 - 19G.
<PAGE>
35
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1998
(Thousands of Dollars)
- -------------------------------------------------------------------------------
SCHEDULE XIX
FINANCIAL DATA SCHEDULE
- -------------------------------------------------------------------------------
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 1,832
2. Total Investments 1,461
3. Total Current and Accrued Assets 117,992
4. Total Deferred Debits 31,116
5. Balancing Amount For Total Assets and Other Debits 0
6. Total Assets and Other Debits 152,401
7. Total Proprietary Capital 2,049
Other Noncurrent Liabilities 66,124
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 74,627
12. Total Deferred Credits 4,601
13. Accumulated Deferred Income Taxes 0
14. Total Liabilities and Proprietary Capital 152,401
15. Services Rendered to Associate Companies 407,101
16. Services Rendered to Nonassociate Companies 0
17. Miscellaneous Income or Loss 312
18. Total Income 407,413
19. Salaries and Wages 11,470
20. Employee Pensions and Benefits 29,709
21. Balancing Amount For Total Expenses 366,234
22. Total Expenses 407,413
23. Net Income (Loss) 0
24. Total Expenses (Direct Costs) 358,195
25. Total Expenses (Indirect Costs) 48,906
26. Total Expenses (Total) 407,101
27. Number Of Personnel End of Year 3,054
- -------------------------------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
36
ANNUAL REPORT OF SOUTHERNNUCLEAR OPERATING COMPANY, INC.
FOR THE YEAR ENDED DECEMBER 31, 1998
President &
Chief Executive Officer
|
|
Executive Assistant---------|
|
|
|
| | | | | |
| | | | | |
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Admin Vice- Technical Human Executive Corp Sec/ Governemtal
Services President Services Resources Vice- Asst to Relations
Vice & Corp Vice- SR VP Presient Pres/ Manager
President Counsel Presient The Nuclear Asst Treas |
Southern | | |
Company | | |
| | |
------------------------------------------------ |
Farley Project Vogtle Project Hatch Project FEDERAL NUCLEAR
Vice-President Vice-President Vice-President ENG MANAGER
-COMPTROLLER STRATEGIC NUCLEAR | | | GOVERNMENTAL
TREASURER ANALYSIS FUEL | | | RELATIONS
CHIEF CORP COMP MANAGER | | | ASSISTANT
FINANCIAL CONCERNS INSPECT & NUCLER PLANT NUCLEAR PLANT NUCLEAR PLANT
OFFICER COORDINATOR TEST GEN MANGER GEN MANAGER GEN MANAGER
-EMPLOYEE SVS NUCLEAR SUPPORT NUCLEAR SUPPORT NUCLEAR SUPPORT
RELATIONS MANAGER GEN MANAGER GEN MANAGER GEN MANAGER
MANAGER CORP SAFETY AUDIT SAFETY AUDIT SAFETY AUDIT
-S&H QUALITY & ENG & ENG & ENG
MANAGER SVCS REV MANAGER REV MANAGER REV MANAGER
-SECURITY MANAGER STEAM GENERATOR
MANAGER CORP REPLACEMENT PROJ
-RECORDS QUALITY MANAGER
MANAGEMENT SVCS
& GEN SVCS MANAGER
SUPV NUC TECH
-MATRIAL SVCS GEN
SERVICES MANAGER
MANAGER PROJECT
-CORPORAT MANAGER
COMMUNICATIONS
MANAGER
-HR TEAM
LEADER*
-IR
BUSINESS
ANALYST*
*SCS Employee
</TABLE>
<PAGE>
37
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1998
- ------------------------------------------------------------------------------
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, 1998
- ------------------------------------------------------------------------------
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 1998.
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 5.28% to 5.80%. Interest of $282,588 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 94,196
Georgia Power 188,392
-------
282,588
-------
<PAGE>
39
ANNUAL REPORT OF Southern Nuclear Operating Company, Inc.
For the Year Ended December 31, 1998
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 30, 1999
