CERTIFICATE OF NOTIFICATION
filed by
THE SOUTHERN DEVELOPMENT AND INVESTMENT GROUP, INC.
Pursuant to order of the Securities and Exchange Commission dated January 25,
1995, in the matter of File No. 70-8173.
--------------------------
The Southern Development and Investment Group, Inc. (Southern Development)
pursuant to Rule 24, hereby provides the following information as required by
the above-mentioned order:
(a) Statement of Income
<TABLE>
<CAPTION>
SOUTHERN DEVELOPMENT & INVESTMENT GROUP, INC.
INCOME STATEMENT (unaudited)
NINE MONTHS ENDED
SEPTEMBER 1995
<S> <C>
REVENUE
Revenue $10,444,440
Interest Income 43,314
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TOTAL SALES 10,487,754
EXPENSES
Salaries and Wages 3,108,500
Rent 137,751
Depreciation/Amortization 112,663
Office Supplies and expenses 635,227
Outside Services Employed 4,345,342
Alabama Power Company 304,466
Georgia Power Company 2,254,603
Gulf Power Company 55,581
Mississippi Power Company 44,333
Southern Company Services 4,789,285
Maintenance 57,879
Miscellaneous General 284,313
Insurance 1,867
Taxes Other than Income 18,029
---------------
TOTAL EXPENSES 16,149,839
NET INCOME (LOSS) BEFORE TAX (5,662,085)
Benefit for Income Taxes 1,981,426
NET INCOME (LOSS) AFTER TAXES $(3,680,659)
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(b) Balance Sheet
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<CAPTION>
SOUTHERN DEVELOPMENT & INVESTMENT GROUP, INC.
BALANCE SHEET (unaudited)
September 30, 1995
SEPTEMBER
ASSETS 1995
<S> <C>
Cash and temporary investments $ 101,825
Accounts Receivable:
Associated companies 1,879,773
Customers and others, less allowance
for doubtful accounts 4,296,234
Costs and estimated earnings in excess
of billings on contracts 3,052,195
Prepaids and other 30,776
Materials and supplies 101,343
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Total current assets 9,462,146
Investments-Envirotech 1,966,890
Office furniture, fixtures, equipment, and
leasehold improvements 1,300,919
Less accumulated depreciation and amortization (514,552)
Net property and equipment 786,367
Intangible and other assets, net 1,667,060
TOTAL ASSETS $13,882,463
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts Payable:
Associated companies $ 812,510
Other 5,459,345
Billings in excess of costs and estimated
earnings on contracts 1,815,660
Other accrued liabilities 1,149,319
Total current liabilities 9,236,834
Noncurrent deferred income taxes 39,157
Total liabilities 9,275,991
Common Stock, par value $1; 500 shares authorized
and outstanding 500
Additional paid-in capital 8,286,631
Retained earnings (3,680,659)
Total stockholders' equity 4,606,472
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 13,882,463
============
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(c) Cash Flow Statement
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<CAPTION>
SOUTHERN DEVELOPMENT & INVESTMENT GROUP, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995
NINE MONTHS ENDED
SEPTEMBER, 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C>
Net Loss $(3,680,659)
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Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation/amortization 112,663
Changes in operating assets and liabilities:
Accounts Receivable (6,155,771)
Costs and estimated earnings in excess of billings
on contracts (3,052,195)
Deferred income taxes 133,156
Prepaids and other assets (106,542)
Accounts payable and other accrued liabilities 7,327,522
Billings in excess of costs and estimated earnings
on contracts 1,815,660
-----------
Total adjustments 74,493
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Net cash used in operating activities (3,606,166)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Project Investment (1,966,890)
Purchase of property and equipment, net (2,392,017)
-----------
Total cash flows from investing activities (4,358,907)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Additional capital transfers 2,429,202
Additional capital contributions 3,080,000
-----------
Total cash flows from financing activities 5,509,202
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INCREASE (DECREASE) IN CASH AND TEMPORARY
INVESTMENTS (2,455,871)
CASH AND TEMPORARY INVESTMENTS AT BEGINNING
OF YEAR 2,557,696
CASH AND TEMPORARY INVESTMENTS AT END OF PERIOD $ 101,825
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(a) A narrative of activities undertaken during the previous quarter (third
quarter, 1995) in each of the following areas:
(i) Prototype Energy Management System
Development has continued market research and product development
with respect to evaluation of interactive energy management technologies and is
continuing discussions with respect to the acquisition of communications
capacity for the required communications system and is developing a pilot
project in suburban Atlanta.
(ii) Energy Management and Efficiency Services
Development has continued product development and has engaged in
market research with respect to required energy management and efficiency
services and projects, but has not engaged in any such project on a commercial
basis.
(iii) POWERcall(tm)
Development has continued to work on the development of a business
plan for the commercialization of POWERcall(tm). In the interim, it is
conducting a pilot project in Birmingham, Alabama which provides power
monitoring to approximately 200 Alabama Power customers and a combined power
monitoring and home security monitoring to approximately 545 Alabama Power
employees and retirees. This past quarter the program was expanded to all
Southern Company employees in the state of Alabama.
(iv) Research and Development
Development continued to focus research and development on services
which can be offered to improve customer satisfaction with the core electric
utility business, including the following: prototype energy management, energy
management and efficiency services, power monitoring and home security, home
monitoring automation, and energy storage.
(v) Energy and Resource Recovery Facilities
Development evaluated a variety of such projects and with the
exception of a potential energy storage project which is still under
consideration, Development elected not to participate.
(vi) Technical Consulting Services
Development continued to provide the technical consulting services
formerly provided by SEI, including engineering services, transformer testing
and repair, environmental testing, and procurement inventory management and
joint procurement services.
(vii) Licensing of Intellectual Property
Development continued to provide support for the Good Cents program,
including activities related to the Good Cents Environmental Home Program and
the Residential Building Energy Program, including technical support and
training with respect to Good Cents programs. Development also continued
Enerlink product development and activities relating to the licensing of
Enerlink and the servicing of such license contracts.
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(b) A project-by-project table, covering both the previous quarter and the time
period that has elapsed since the date of this order, for each of Development's
business activities comparing--
(i) the amount of the Commission's authorization for such business
activity;
(ii) the amount of Development's budget for such business activity;
(iii) the actual investment expended on such business activity.
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<CAPTION>
COMMISSION'S 1995 3RD QUARTER INVESTMENT
BUSINESS LINES AUTHORIZATION BUDGET INVESTMENT # SINCE INCEPTION#
<S> <C> <C> <C> <C>
Prototype Energy $175 million $7.21 million $.52 million $.62 million
Management System
Energy Management and $40 million $.50 million $.12 million $.13 million
Efficiency Services
POWERcall (tm) $20 million $1.49 million $.21 million $.23 million
Research and Development $20 million $5.46 million $.50 million $.55 million
Activities
Energy and Resource $10 million $0.00 $0.00 $0.00
Recovery Facilities
Technical Consulting $5 million $0.00 $0.00 $0.00
Services
Licensing of $5 million $.74 million $1.45 million $1.55 million
Intellectual Property
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# - Reflects capital contributions to Development by The Southern Company, and
does not include investments made from cash internally generated by Development.
<PAGE>
(c) A description of any services received by Development from Southern Company
Services and from each of the Southern Operating Companies. This description
should contain the dollar value of the services by company and the number and
type of personnel used to render the services.
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<CAPTION>
DOLLAR VALUE OF SERVICE NUMBER OF PERSONNEL TYPE OF PERSONNEL
OPERATING COMPANY
<S> <C> <C> <C>
Alabama Power Company 87,057 N/A* Chemists
- -Technical Consulting for Instructors
Environmental Matters
Georgia Power Company 380,431 80 Skilled Technicians,
- -Technical Consulting and Repair Engineers,
of Equipment Administrative
Gulf Power Company 3,153 1 Marketing
- -Market Research re.
Interactive Energy Management
Mississippi Power Company 26,274 14 Mechanics,
- -Repair of Equipment Administrative
Southern Company Services 1,776,893 234 ** Engineering,
- -Professional & Technical Procurement,
Services including: Finance, Accounting, Marketing,
Market Research, Information Information Resource
Resource, Telecommunications,
Accounting, and Engineering
Services
* N/A - Not available
** These employees recorded a total of 20,319 hours for the quarter which is the equivalent of 39 full
time employees.
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(d) A description of any services rendered by Development to any associate
company within the Southern System. Development will include a statement as to
whether the services were at cost.
1. Support of Operating Companies Good Cents Program.
2. Technical support and training for Residential Building Energy
Program (RBEP) software package.
3. Services associated with developing, deploying and maintaining
information based products that facilitate the delivery of
competitive pricing options to large accounts. These software products include
customer energy use analysis systems, enhanced energy use analysis products for
account executives to augment their customer service role, billing system
systems for billing large accounts and rate analysis products for use by rate
departments for designing, developing and administering new rates. The services
include design, development of new software solutions as well as adaptation of
existing software programs related to the above applications.
All services were at cost, except that intellectual property licensed to
affiliate companies was for no charge except for the cost of making the property
or a copy thereof available, and except for the cost of making required
modifications.
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(e) A description of customer financing provided by or through Development,
including--
(i) the amount of such financing by type of energy conservation and
efficiency equipment; (ii) the accumulative amount of financing
outstanding by customer classification; (iii) bad debt write-off
incurred during the quarter; (iv) disclosure of the material terms and
conditions applying to such financing.
Development has no customer financing.
(f) Amounts and forms of currently effective guarantees of, and similar
provisions and arrangements concerning, performance and undertaking of other
obligations by Development.
None.
(g) Amounts and forms of currently effective indemnifications of, and sureties
on, bonds or other obligations issued on behalf of Development.
None.
(h) Amounts and forms of guarantees of, and similar provisions and arrangements
concerning, performance and undertaking of other obligations by Development.
None.
(i) Amounts and forms of indemnifications of, and sureties on, bonds or other
obligations issued on behalf of Development.
None.
SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, the undersigned company has duly caused this certificate to the signed
on its behalf by the undersigned thereunto duly authorized.
Dated November 14, 1995 THE SOUTHERN DEVELOPMENT AND INVESTMENT GROUP, INC.
BY /s/ Tommy Chisholm
Tommy Chisholm
Secretary
