File No. 70-8277
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Post-Effective Amendment No. 1
(Amendment No. 7)
to
FORM U-1
APPLICATION OR DECLARATION
under
The Public Utility Holding Company Act of 1935
THE SOUTHERN COMPANY
64 Perimeter Center East
Atlanta, Georgia 30346
(Name of company or companies filing this statement
and addresses of principal executive offices)
THE SOUTHERN COMPANY
(Name of top registered holding company parent
of each applicant or declarant)
Tommy Chisholm, Secretary
The Southern Company
64 Perimeter Center East
Atlanta, Georgia 30346
(Names and addresses of agents for service)
The Commission is requested to mail signed copies of all
orders, notices and communications to:
W. L. Westbrook John D. McLanahan
Financial Vice President Troutman Sanders
The Southern Company 600 Peachtree Street, N.E.
64 Perimeter Center East Suite 5200
Atlanta, Georgia 30346 Atlanta, Georgia 30308-2216
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INFORMATION REQUIRED
Item 1. Description of Proposed Transactions.
1.1 Background. The Southern Company ("Southern") is a
registered holding company under the Public Utility Holding
Company Act of 1935, as amended (the "Act"). By order dated
January 25, 1994 (HCAR No. 25980) (the "1994 Order"), Southern
was authorized to issue and sell up to 10,000,000 additional
shares of its authorized but unissued common stock, par value $5
per share, as such number may be adjusted for any share split or
distribution authorized by the Commission (the "Additional Common
Stock"), in one or more transactions from time to time not later
than December 31, 1996. In a separate proceeding, the Commission
authorized a 2-for-1 share split, which was subsequently
consummated. (See HCAR No. 25979, dated January 25, 1994).
In the 1994 Order, the Commission authorized Southern to
utilize up to $500 million of the net proceeds from the sale of
the Additional Common Stock to make investments from time to time
through December 31, 1996, in one or more "exempt wholesale
generators" ("EWGs") or "foreign utility companies" ("FUCOs") in
order to fund, in whole or in part, investments by such
subsidiaries in facilities that such subsidiaries are permitted
to acquire and own, and to fund ongoing development costs
associated with potential direct or indirect investments by
Southern in such entities.
Southern was also authorized under the terms of the 1994
Order to guarantee the securities of one or more EWGs or FUCOs,
from time to time through December 31, 1996, in an aggregate
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principal amount not to exceed $500 million at any one time
outstanding (the "Guarantees"), provided that any Guarantee
outstanding on December 31, 1996 shall remain effective until
expiration or termination in accordance with its terms, and
provided further that the amount of such outstanding Guarantees
and the net proceeds from sales of the Additional Common Stock
invested by Southern in EWGs and FUCOs shall at no time in the
aggregate exceed $500 million.
Southern has heretofore issued and sold part of the
Additional Common Stock and has utilized approximately $95
million of the net proceeds of such sales of Additional Common
Stock to make investments in EWGs and FUCOs (or to repay
indebtedness previously incurred by Southern for that purpose).1
In addition, Southern has provided Guarantees in respect of $43.7
million principal amount of securities of EWGs and FUCOs
currently outstanding. At March 31, 1995, Southern's "aggregate
investment," as determined in accordance with Rule 53(a), in all
EWGs and FUCOs was approximately $500.1 million,2 or
approximately 15.9% of Southern's "consolidated retained
earnings," as defined in Rule 53(a), as of such date ($3.144
billion).
1 These investments are in companies or partnerships that
are EWGs operating or to be constructed in Hawaii, Virginia, and
Trinidad and Tobago, and in FUCOs operating in The Grand Bahamas,
Chile, and Argentina.
2 The total includes Southern's investment of approximately
$38.3 million in subsidiaries (referred to as "Project Parents")
organized for the purpose of acquiring and holding the securities
of FUCOs. (See HCAR No. 26096, dated August 3, 1994).
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1.2 Additional Common Stock. Southern now requests
authority to issue and sell up to 25 million shares of Additional
Common Stock (as such number may be adjusted for any stock split
or distribution hereafter authorized) from time to time through
December 31, 1997, inclusive of the remaining 9.4 million shares
of Additional Common Stock that Southern is currently authorized
to issue and sell under the terms of the 1994 Order. Some or all
of the Additional Common Stock may be issued and sold through a
primary shelf registration program in accordance with Rule 415
under the Securities Act of 1933, as amended (the "Securities
Act"), as heretofore described in this proceeding (but without
regard to any limitation imposed under former Rule 50), or
otherwise to or through one or more underwriters or dealers for
resale in one or more public offerings, or to investors directly
or through agents.
Southern intends to use some or all of the net proceeds
from the sale of the Additional Common Stock, together with other
available funds, to make investments in subsidiaries, including
EWGs and FUCOs, and for other corporate purposes. Investments by
Southern in subsidiaries would only be made in accordance with
existing or future authorizations in separate proceedings, or in
accordance with such exemptions as may exist under the Act and
the rules and regulations thereunder.3
3 Southern is currently authorized to make investments in
Southern Company Services, Inc. (File No. 70-8203), Southern
Electric International, Inc. (File No. 70-7932), The Southern
Development and Investment Group, Inc. (File Nos. 70-8173 and 70-
8563), Southern Electric Railroad Company (File No. 70-7911),
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1.3 Guarantees. Southern requests authority for an
increase from $500 million to $1.2 billion in the aggregate
principal amount of securities of EWGs and FUCOs in respect of
which Southern may at any time provide Guarantees, and for an
extension of the date through which such Guarantees may be issued
from December 31, 1996 to December 31, 1997, provided that any
Guarantee outstanding on December 31, 1997 would expire or
terminate in accordance with its terms; and provided further that
the sum of (i) the principal amount of securities of EWGs and
FUCOs in respect of which Guarantees are at any time outstanding,
(ii) the net proceeds of sales of the 25 million shares of
Additional Common Stock invested directly or indirectly by
Southern in EWGs and FUCOs, as herein proposed, (iii) the net
proceeds of sales of additional shares of Southern's common stock
invested directly or indirectly in EWGs and FUCOs, as authorized
in File No. 70-8435, and (iv) the proceeds of short-term and term
loan borrowings and/or commercial paper sales by Southern at any
time invested in EWGs and FUCOs, as authorized in File No. 70-
8309, shall at no time in the aggregate exceed the greater of (x)
$1.072 billion, and (y) 50% of Southern's "consolidated retained
earnings," determined in accordance with Rule 53(a)
Southern Communications Services, Inc. (File No. 70-8233),
Southern Nuclear Operating Company (File No. 70-8567), and Mobile
Energy Services Holdings, Inc. (formerly Mobile Energy Services
Company, Inc.) (File No. 70-8505), each of which is a wholly-
owned subsidiary of Southern. In addition, Southern is
authorized to make indirect investments in EWGs and FUCOs through
so-called "Project Parents." (File No. 70-8421). Southern does
not currently have authority to make additional investments in
its operating electric utility subsidiaries.
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(hereinafter, the "Rule 53 Limitation"). The current Rule 53
Limitation ($1.072 billion) is based on Southern's "consolidated
retained earnings" and "aggregate investment" at March 31, 1995,
as shown in Item 1.4, below.
1.4 Compliance with Rule 53. Under Rule 53(a), the
Commission shall not make certain specified findings under
Sections 7 and 12 in connection with a proposal by a holding
company to issue securities for the purpose of acquiring the
securities of or other interest in any EWG, or to guarantee the
securities of any EWG, if each of the conditions in paragraphs
(a)(1) through (a)(4) thereof are met, provided that none of the
conditions specified in paragraphs (b)(1) through (b)(3) of Rule
53 exists. In that regard, Southern states that, giving effect
to the proposals made herein, all of the conditions set forth in
Rule 53(a) are and will be satisfied and none of the conditions
set forth in Rule 53(b) exists or, as a result thereof, will
exist.
Rule 53(a)(1): At March 31, 1995, Southern had
invested, directly or indirectly through Project Parents, an
aggregate of $500.1 million in EWGs and FUCOs. The average of
the consolidated retained earnings of Southern reported on Form
10-K or Form 10-Q, as applicable, for the four consecutive
quarters ended March 31, 1995, is $3.144 billion. Accordingly,
based on Southern's "consolidated retained earnings" at March 31,
1995, the current Rule 53 Limitation is about $1.072 billion,
calculated as follows: 50% of "consolidated retained earnings"
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($1.572 billion) less "aggregate investment" at March 31, 1995
($500.1 million) equals $1.072 billion.
Rule 53(a)(2): Southern maintains books and records
enabling it to identify investments in and earnings from each EWG
and FUCO in which it directly or indirectly holds an interest. In
addition, each domestic EWG in which Southern holds an interest
maintains its books and records and prepares its financial
statements in conformity with U.S. generally accepted accounting
principles ("GAAP"). The books and records and financial
statements of each FUCO in which Southern holds an interest
(including those that are "majority-owned subsidiaries" and one
which is not) are maintained and prepared in conformity with
GAAP. All of such books and records and financial statements will
be made available to the Commission, in English, upon request.
Rule 53(a)(3): No more than 2% of the employees of
Southern's operating utility subsidiaries will, at any one time,
directly or indirectly, render services to EWGs and FUCOs. Based
on current staffing levels of Southern's domestic operating
utility subsidiaries (such companies currently employ, in the
aggregate, approximately 27,000 salaried and hourly employees),
no more than 540 employees of these companies, in the aggregate,
determined on a full-time-equivalent basis, will be utilized at
any one time in rendering services directly or indirectly to EWGs
and FUCOs. In a separate proceeding (File No. 70-7932), certain
of Southern's operating utility subsidiaries have been authorized
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to render services to EWGs and FUCOs indirectly through Southern
Electric International, Inc.
Rule 53(a)(4): Southern is simultaneously submitting a
copy of this Post-Effective Amendment, and will submit copies of
any Rule 24 certificates required hereunder, as well as a copy of
Southern's Form U5S, to the Federal Energy Regulatory Commission
and to each of the public service commissions having jurisdiction
over the retail rates of Southern's operating utility
subsidiaries.
In addition, Southern states that the provisions of Rule
53(a) are not made inapplicable to the authorization herein
requested by reason of the provisions of Rule 53(b).
Rule 53(b)(1): Neither Southern nor any subsidiary of
Southern is the subject of any pending bankruptcy or similar
proceeding.
Rule 53(b)(2): Southern's average consolidated retained
earnings for the four most recent quarterly periods ($3.144
billion) represents an increase of approximately $69 million in
the average consolidated retained earnings for the previous four
quarterly periods ($3.075 billion).
Rule 53(b)(3): In the previous fiscal year, Southern
did not report any operating losses attributable to its direct or
indirect investments in EWGs and FUCOs.
Item 2. Fees, Commissions and Expenses.
Information as to fees and expenses to be incurred in
connection with each issuance and sale, other than underwriting
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discounts and commissions, will be set forth in the appropriate
item of Exhibit C hereto, to which reference is hereby made.
Item 3. Applicable Statutory Provisions.
Southern considers that the issuance and sale of the
Additional Common Stock and making of the Guarantees are subject
to the provisions of Sections 6(a), 7, 12(b), 32 and 33 of the
Act and Rules 45, 53 and 54.
The proposed transactions will be carried out in
accordance with the procedures specified in Rule 23 and pursuant
to an order of the Commission with respect thereto.
Item 4. Regulatory Approval.
The issuance by Southern of the Additional Common Stock
and Guarantees is not subject to the jurisdiction of any state
commission or of any federal commission other than the Securities
and Exchange Commission.
Item 5. Procedure.
Southern requests that the Commission's order be issued
as soon as the rules allow, and that there be no thirty-day
waiting period between the issuance of the Commission's order and
the date on which it is to become effective. Southern hereby
waives a recommended decision by a hearing officer or other
responsible officer of the Commission and hereby consents that
the Division of Investment Management may assist in the
preparation of the Commission's decision and/or order in this
matter unless such Division opposes the matters covered hereby.
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Item 6. Exhibits and Financial Statements.
(a) Exhibits.
A-1(a) - Composite Certificate of Incorporation of
Southern, reflecting all amendments thereto
through January 5, 1994. (Designated in
Registration No. 33-3546 as Exhibit 4(a), in
Certificate of Notification, File No. 70-
7341, as Exhibit A, and in Certificate of
Notification, File No. 70-8181, as
Exhibit A).
A-1(b) - By-laws of Southern as amended effective
October 21, 1991, and as presently in effect.
(Designated in Form U-1, File No. 70-8181, as
Exhibit A-2).
C - Registration statement of Southern filed
pursuant to the Securities Act of 1933, as
amended. (To be filed by amendment).
F-1 - Opinion of Troutman Sanders. (To be filed by
amendment).
H-1 - Form of Federal Register Notice.
Exhibits heretofore filed with the Securities and
Exchange Commission and designated as set forth above are hereby
incorporated herein by reference and made a part hereof with the
same effect as if filed herewith.
(b) Financial Statements.
Corporate balance sheet of Southern at March 31,
1995.
Corporate statement of income of Southern for the
twelve months ended March 31, 1995.
Consolidated balance sheet of Southern and its
subsidiaries at March 31, 1995. (Designated in
Southern's Form 10-Q for the quarter ended March
31, 1995, File No. 1-3526.)
Consolidated statement of income for Southern and
its subsidiaries for the twelve months ended
March 31, 1995. (Designated in Southern's Form
10-Q for the quarter ended March 31, 1995, File
No. 1-3526.)
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Since March 31, 1995, there have been no material
changes, not in the ordinary course of business, in the financial
condition of Southern or of Southern and its subsidiaries
consolidated from that set forth in or contemplated by the
foregoing financial statements.
Item 7. Information as to Environmental Effects.
(a) As described in Item 1, the proposed transactions
are of a routine and strictly financial nature in the ordinary
course of Southern's business. Accordingly, the Commission's
action in this matter will not constitute any major federal
action significantly affecting the quality of the human
environment.
(b) No other federal agency has prepared or is
preparing an environmental impact statement with regard to the
proposed transactions.
SIGNATURE
Pursuant to the requirements of the Public Utility
Holding Company Act of 1935, the undersigned company has duly
caused this statement to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: June 16, 1995 THE SOUTHERN COMPANY
By:/s/Tommy Chisholm
Tommy Chisholm, Secretary
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Exhibit H-1
FORM OF FEDERAL REGISTER NOTICE
The Southern Company, a registered holding company, has
filed a post-effective amendment to its application or
declaration heretofore approved pursuant to Sections 6(a), 7,
12(b), 32 and 33 of the Act and Rules 45, 53 and 54 thereunder.
By order dated January 25, 1994 (HCAR No. 25980) (the "1994
Order"), Southern was authorized to issue and sell in one or more
transactions from time to time through December 31, 1996, up to
10 million shares of its authorized shares of common stock, $5
par value, as such number of shares may be adjusted for any
subsequent share split. Since the date of the 1994 Order,
Southern has carried out a 2-for-1 stock split in accordance with
authorization obtained in a separate proceeding. As adjusted for
the share split, 9.4 million shares of the additional common
stock remain unsold. Southern was authorized to use up to $500
million of the net proceeds of sales of the additional common
stock to make investments in one or more "exempt wholesale
generators" and "foreign utility companies."
Southern was also authorized in the 1994 Order to guaranty,
from time to time through December 31, 1996, the securities of
any associate "exempt wholesale generators" or "foreign utility
companies" in an aggregate principal amount at any time
outstanding not to exceed $500 million, provided that any
guaranties outstanding on that date would terminate or expire in
accordance with their terms; and provided further that the net
proceeds of sales of the additional common stock used to make
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investments in any "exempt wholesale generators" or "foreign
utility companies" and the aggregate principal amount of the
securities of such entities in respect of which Southern has
issued any guaranty may not, in the aggregate, exceed $500
million.
Southern is now seeking approval to issue and sell in one or
more transactions from time to time through December 31, 1997, up
to 25 million additional shares of its common stock, inclusive of
the remaining 9.4 million shares that Southern is authorized to
sell under the 1994 Order; and to guaranty, from time to time
through December 31, 1997, the securities of one or more "exempt
wholesale generators" or "foreign utility companies" in an
aggregate principal amount at any time outstanding not to exceed
$1.2 billion; provided that the net proceeds from sales of common
stock used to make such investments and the principal amount of
such outstanding securities that are guaranteed, when added to
Southern's "aggregate investment" in all "exempt wholesale
generators" and "foreign utility companies" (approximately $500.1
million at March 31, 1995), may not exceed 50% of Southern's
"consolidated retained earnings," as defined in Rule 53(a). At
March 31, 1995, 50% of Southern's "consolidated retained
earnings" was about $1.572 billion.
Southern also proposes to use the net proceeds of the
additional common stock, together with other available funds, to
make additional investments in other subsidiaries, to the extent
authorized in separate proceedings.
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